The Hindu Business Line : Deutsche Bank, Goldman Sachs to manage FLAG Tele IPO

New Delhi March 29 Reliance Communications has appointed Deutsche Bank and Goldman Sachs to manage the proposed initial public offering for its international undersea cable subsidiary FLAG Telecom.

Morgan Stanley and UBS were among those who were considered by Reliance. The company is expected to divest 10-15 per cent of its equity in FLAG Telecom, which will be listed on the London Stock Exchange. At present, FLAG is a 100 per cent subsidiary of Reliance Communications.

The IPO proceeds will be used to part-finance the $1.5-billion expansion plans announced last year that include laying 50,000 km fresh undersea cable.

According to company sources, the initial valuation of the undersea cable firm is estimated to be about $2 billion as per the numbers worked out by merchant bankers.

The expansion plan for FLAG will add extra capacity for voice calls, Internet and multimedia services.

The fibre-optic cable would eventually reach 60 countries and connect 5 billion global customers.

FLAG would have the capability to carry 2.5 billion simultaneous voice calls, 300 million simultaneous web chats, 52 million simultaneous video chats and enabling 20 million students in educational institutions of India to offer e-learning simultaneously.

FLAG has an established customer base of more than 200 leading operators, including all the top 10 international carriers.

It owns and manages an extensive next generation optical fibre network spanning four continents, connecting 37 key business markets in Asia, Europe, West Asia and the US.

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