GCX owner RCom ‘becoming a real estate company’, chairman tells AGM
Reliance Communications will focus on real estate alone once it has exited the telecoms industry, the company chairman said today.
Anil Ambani told RCom’s annual general meeting in Mumbai today that it will leave telecoms entirely, having run up debts of 400 billion rupees ($5.5 billion).
“We have decided that we will not proceed in this sector. And many other companies have taken a similar call. This is very much a writing on the wall,” he said, according to agency reports.
“As we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business.”
RCom is part-way through selling off its consumer mobile telecoms business to Reliance Jio, founded and run by Anil Ambani’s brother, Mukesh Ambani.
But the “enterprise business” comment is understood to be a reference to Global Cloud Xchange (GCX), the group’s international carrier business and its enterprise telecoms and data centre operations.
RCom is considering two bids GCX. Capacity understands both bids are for $1.1 billion. One is from a consortium of private equity investors and the other is from I Squared Capital (ISQ), which last year bought HGC Global Communications from CK Hutchison.
However Ambani said nothing about the bids at today’s meeting. He referred to “the residual company”, saying it will serve 35,000 businesses and that it will get half of its revenues from outside India – leading to suspicions that a sale of GCX is drifting into the distance.
He told the AGM that “Reliance Realty will be the engine of growth for the future of this company”. Reliance Realty is a wholly owned subsidiary of RCom.
Ambani pointed to Dhirubhai Ambani Knowledge City, a 54-hectare development on the edge of Mumbai where RCom is based. It is named after his and his brother’s father, who died in 2002, and was the founder of the Reliance empire.
Ambani told the shareholders that the development could create value of 250 billion rupees ($3.4 billion).