Reliance Comm to list undersea cable assets

19 January 2012 | Kavit Majithia


Indian operator Reliance Communications is to list its undersea cable assets on the Singapore stock exchange in a bid to raise up to $1.5 billion and curb its growing debt.

According to unnamed sources close to the matter, Anil Ambani, head of Reliance Communications, has taken the decision to sell undersea cable businesses connecting north Asia with the US and Europe, and list the operations in a Singapore business trust. Once safely placed in the trust, Reliance aims to sell off 75% of this to investors.

The divestment is a major one considering the size of Reliance Communication’s undersea cable operations, which spans across 65,000km, making it one of the largest non-consortium cable operations in the world.

The company previously attempted to sell off this business unit in 2009, but it failed because it found no takers for its $3 billion valuation. Now, it appears Ambani is ready to cut his losses and follow in the footsteps of fellow Asian tycoon Richard Li, owner of Hong Kong based operator PCCW, who listed a trust and raised $1.2 billion in the company’s fixed-line operations.

According to the Wall Street Journal, Reliance is laden with over $6 billion debt load, and it has been aggressively attempting to raise funds in order to address this.

It has also put its tower operations on the market, but there seems to be a lack of interest in the entity from investors. The news comes on the back of a deal signed with an unnamed Chinese bank this week, which is expected to refinance the company’s $1.18 billion debt in overseas bonds that are due to mature in March this year.