Telecom Lead India: In a major setback to the Anil Ambani
promoted Reliance Communications, the promoters have decided to put on hold the
$1-1.5 billion IPO of its undersea cable unit Flag Telecom in Singapore.
Sources, according to media reports, said the IPO was put
on hold on a day when institutional book building was to close. The IPO hit
roadblock due to adverse market conditions.
RCom was looking at listing Flag Telecom through a
Singapore business trust, Global Telecommunications Infrastructure Trust (GTIT)
on the Singapore stock exchange.
The telecom major planned to use the proceeds from the
Singapore listing of GTI to pare some of its Rs 35,839 crore debts.
RCom has been exploring various routes of raising funds,
including selling stake in its telecom tower arm Reliance Infratel, a move that
will help the company retire a major chunk of debt on its books.
As of March 31, 2012, the company has a net debt of Rs
35,839.3 crore on its books.
Reliance Communications said it would look at listing at an
appropriate time in future to unlock the full value of the Flag Telecom assets
in the interest of shareholders.
Recently, the rating agency ICRA has downgraded Reliance
Communication’s long term rating from stable to negative. ICRA is concerned
about the debt of Rs 37,000 crore, at the end of last year and the challenging
operating environment.
