22 June 2018
| Alan Burkitt-Gray
Russian industrial group Sistema has sold all its remaining shares in Reliance Communications of India, only weeks after being poised to buy the whole company.
According to reports the company sold its 10% stake in RCom
"in multiple tranches over the past few months", with reports
saying that Sistema lost $4 billion on its investment.
Capacity has contacted Sistema for a comment and
clarification, but Sistema has not replied.
In late March 2018, Sistema confirmed to Capacity
that it was considering bidding for RCom’s
telecoms business, using earn-out payments originally agreed in
2015 when RCom acquired an Indian mobile business part-owned by
Reports at the time from India said that Sistema had bid $1.2
billion for the operation, plus $300 million that Reliance
Communications (RCom) owed the Russian group. The bids were
understood to include Global Cloud Xchange, RCom’s
Questions were asked about how Sistema, a company with close
ties to the Kremlin, could hope to win approval from regulators
around the world to buy GCX’s international subsea
More recently sources within RCom and GCX told
Capacity that Sistema was not one of the three shortlisted bidders for the
business, including RCom’s enterprise network, the
group’s data centres, and GCX’s
subsea cable network. Capacity understands that the
three bidders include one carrier, one private equity investor
and one partnership between a carrier and a private equity
investor. A decision is expected within weeks.
Sistema, which owns the MTS mobile network in Russia as well as
the MGTS fixed network in Moscow, used to be part-owner
– with an Indian group and the Russian federal
government – of Sistema Shyam Teleservices (SSTL), a
mobile network that traded as MTS India.
RCom bought SSTL in 2017 in exchange for
Sistema’s 10% stake, but in early 2018 RCom pulled out of the Indian mobile
Global Cloud Xchange,