Reliance Communications is looking to sell 75 per cent stake in its under sea cable unit through an Initial Public Offering.
The debt-laden telecom operator is hoping to garner up to $1.5 billion through the sale, according to industry sources. They said that the under sea cable business may be listed in Singapore in the second half of 2012.
This is the second attempt by the company to sell the under sea cable business. In 2009, RCom had scouted for a buyer but found no takers after it asked for nearly $3 billion.
The under sea cable business essentially comprises the FLAG network which RCom had acquired for $207 million in 2003. The company's under sea cable network now spans across 65,000 km connecting key markets in West Asia, Europe, and the US.
A Reliance Communications spokesman in Mumbai declined to comment on any IPO plans, but said in a statement that the company “continually works on various options to unlock value from its unique combination of global telecom assets for the benefit of its shareholders”.
$6.5-b debt
The company had net debt of about $6.5 billion as of end-September and has also been trying to sell its telecom tower business in India to raise funds.
A number of private equity players had shown interest in the tower business but so far the deal has not closed. RCom was also in talks with Reliance Industries to rent out its tower infrastructure in a bid to improve earnings.
On Tuesday, RCom announced that it had tied up with a clutch of banks for a loan to redeem its outstanding foreign currency convertible bonds worth Rs 6,125 crore. Industrial and Commercial Bank of China, China Development Bank Corporation, Export Import Bank of China and other banks are funding the refinance.