RCom plans $1.5 b IPO of its cable unit FLAG Telecom

Anil Ambani-led Reliance Communications (RCom) is looking at raising up to $1.5 billion (over Rs 7,560 crore) through listing of its undersea cable unit FLAG Telecom in Singapore.

According to sources, the company is planning an initial public offering (IPO) of its undersea cable assets FLAG Telecom, seeking a valuation of $2 billion. Under the offer, FLAG Telecom will be listed as a business trust and Deutsche Bank is working on the deal, they added.

The deal may see selling of 75 per cent stake in FLAG Telecom. RCom had acquired Flag Telecom, the undersea cable business, in 2003 for about US$207 million.

RCom has been exploring various routes of raising funds, including selling stake in its telecom tower arm, Reliance Infratel.

Last year, a deal to sell stake to tower major GTL Infrastructure for US$11 billion ( Rs 50,000 crore) fell apart.

As of quarter ended September 2011, the company has a debt amounting to nearly Rs 32,000 crore.

On Tuesday, RCom had announced that three leading Chinese banks have agreed to refinance its outstanding foreign loans worth Rs 6,125 crore.

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