GCX free to look at takeover bids after RCom exits bankruptcy
31 May 2018 | Alan Burkitt-Gray
Indian operator Reliance Communications (RCom) has exited insolvency after agreeing to pay Ericsson only 55% of the $150 million it owed.
At the same time India’s bankruptcy court has agreed that RCom can complete a pair of deals to raise the equivalent of $1.7 billion by selling off its assets.
The sale will not include Global Cloud Xchange (GCX), which has been ring-fenced from the insolvency and which is in negotiation with three unnamed companies to acquire it – but the decision will clear the way for GCX to consider those bids.
RCom will sell its real estate in New Delhi and Chennai to the Canadian company Brookfield Asset Management for $118 million.
At the same time it will sell its spectrum, towers and Indian fibre and switches to unrelated rival Reliance Jio, a company that was started by Mukesh Ambani, the brother of RCom’s boss Anil Ambani. RCom has already shut down its mobile telecoms business after facing huge competitive pressure from Reliance Jio and other companies in the market.
Two years ago RCom was poised to sell a majority stake in its tower assets to Brookfield but that deal was dropped because RCom failed to merge with rival operators.
RCom has also settled its disputes with the minority shareholders in Reliance Infratel, the subsidiary that owns its towers.
RCom expects to complete all its asset sales within the next few weeks..
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