In an unexpected move, Indian mobile operator Reliance Communications (RCom) has decided to cancel the planned IPO of its undersea cable unit Flag Telecom on the Singapore stock exchange.
The company justified its decision saying it wants to “await…
In an unexpected move, Indian mobile operator Reliance Communications (RCom) has decided to cancel the planned IPO of its undersea cable unit Flag Telecom on the Singapore stock exchange.
The company justified its decision saying it wants to “await supportive market conditions and easing of prevailing global uncertainties to proceeds with the offering/listing at an appropriate time in the future, in order to unlock the full value of the Flag Telecom assets in the best interests of its over two million shareholders.”
The decision comes after Flag Telecom delayed the closing of the IPO bookbuilding twice, reportedly to allow sovereign wealth funds to take part in the process. The extended deadline for closing was scheduled for today (20 July).
Standard Chartered, DBS Group, Industrial and Commercial Bank of China (ICBC) and Deutsche Bank were said to be advising on the IPO process.
Reports had previously suggested that the indicative price range was set at US$700m to US$1bn. A successful listing of the unit would have allowed RCom to cut down its debt load, which is estimated to stand at approximately US$7bn.
In the past, the operator had already sought to offload several assets, including its tower unit Reliance Infratel, to shore up its balance sheet.
RCom acquired Flag for US$211m in 2004, about a year after the cable company emerged from bankruptcy protection.
The undersea cableco reportedly generated revenues of US$267.5m in the fiscal year ending March 2012, and RCom expects further increases over the next years, reaching revenues of US$308.8m in fiscal year 2014.
