Copying and distributing are prohibited without permission of the publisher
Reliance to sell 75% of Flag Telecom
20 March 2012
Reliance Globalcom to float submarine unit Flag on Singapore exchange to help pay Reliance Communications’ debts
Flag Telecom — owned by Indian operator Reliance Communications since 2003 — has filed a prospectus in the Singapore Stock Exchange to list and sell a 75% stake in its submarine cables unit for between $1.25 and $1.5 billion.
Flag, which is controlled by Reliance Communications’s subsidiary Reliance Globalcom, is likely to be listed under the business trust structure, and after the sale — expected in the second week of May 2012 — Reliance will keep a 25% equity stake, according to Indian newspaper Business Standard. The proceeds will be used to cut Reliance Communication’s overall debt of $6.77 billion.
Flag’s management will continue to control the business and assets for continuity in operations. Flag owns five undersea cable networks covering more than 65,000 kilometres. Flag was originally set up in 1990 by a group of companies including Nynex, later part of Verizon.
Singapore’s DBS, Deutsche Bank, Industrial & Commercial Bank of China and Standard Chartered are among the bankers for the issue.
Meanwhile Reliance’s plan to offload its tower operations has recently reached the final lap. According to Business Standard, private equity firms Carlyle Group and Blackstone have agreed to acquire up to 95% of Reliance Infratel, with the operations valued at between $2.9 and $3.8 billion. GTB
Further reading from Global Telecoms Business:
Reliance looks to sell Flag Telecom shares 19 Jan 2012
Reliance unit revamps submarine networks 07 Oct 2011
Flag Telecom plans $500m bond sale 15 Nov 2010
Interview: Kamran Sistanizadeh of Reliance Globalcom 13 May 2010
Reliance Comm seeks $3bn asset sale 15 Dec 2009