Anil Ambani’s Reliance Communications is looking to sell an 80% stake in Reliance Globalcom to Bahrain-based Batelco for Rs60bn (US$1.1bn), according to the Times of India.
Reliance Globalcom is RCom’s enterprise business unit.
This potential deal…
Anil Ambani’s Reliance Communications is looking to sell an 80% stake in Reliance Globalcom to Bahrain-based Batelco for Rs60bn (US$1.1bn), according to the Times of India.
Reliance Globalcom is RCom’s enterprise business unit.
This potential deal is the latest attempt by billionaire Anil Ambani to reduce the telco’s Rs370bn (US$6.8bn) debt load.
A few days ago RCom agreed a fibre sharing deal with Reliance Industries, marking a thawing of relations between Anil and his brother Mukesh Ambani.
Under the Rs12bn (US$221m) deal the telecoms arm of Reliance Industries, controlled by Mukesh Ambani, will use RCom’s fibre network.
The company is also reportedly in talks to lease tower assets to Reliance Industries in a deal that could see the latter buy a stake in Reliance Infratel, the towerco unit of RCom.
In addition, the telco giant is hoping to sell its DTH business, Reliance Digital TV, to Sun Group for approximately Rs20bn (US$366m), according to local reports.
It has been estimated that RCom could raise approximately Rs90bn (US$1.7bn) from those various deals.
“To repay the rest of its debt, RCom could potentially look at selling its telecoms towers,” Rohan Dhamija, head of India and South Asia at Analysys Mason, told TelecomFinance.
“If the company signs the leasing agreement with Reliance Industries, its tower assets could become more attractive to a private equity fund,” he added.
In mid-2011, RCom had already considered offers for its 50,000 towers. A few months later private equity firms Blackstone and Carlyle emerged as most likely buyers for these assets. A deal was expected to fetch between Rs150bn (US$3bn) and Rs20bn (US$4bn). But valuations issues, the 2G scam and the subsequent decision by India’s Supreme Court to cancel 122 licences saw the potential deal reach a deadlock.
However, RCom may now be turning a new corner in its attempt to reduce its debt, according to Dhamija. “This agreement with Reliance Industries will be crucial for RCom,” he said, adding: “the impact on the Indian telecoms market will also likely be significant, with two giants with deep pockets coming together.”
With a dozen of mobile operators and a penetration rate over 70%, the Indian telecoms industry is overcrowded and the smaller companies are struggling to survive.
