Reliance Communications unit to get assistance again from China Banks

Telecom Lead India: Reliance Communications unit is set
to get assistance again from China Banks.

According to media reports, four sovereign wealth funds,
including Singapore’s Temasek Holdings and China Investment Corp, agreed to
invest in the IPO of Reliance Communications’ undersea cable unit Global
Telecommunication Infrastructure Trust.

Four souvereign wealth funds from Singapore, the Middle
East and China have confirmed participation of $250 to 300 million in the GTI
Trust’s IPO.

Besides Temasek and CIC, Investment Corp of Dubai too has
confirmed participation in Global Telecommunications Infrastructure Trust’s IPO
in Singapore. RCom is looking at listing Flag Telecom through a Singapore
business trust, Global Telecommunications Infrastructure Trust (GTIT) on the
Singapore stock exchange. GTI Trust owns four subsea cable systems that carry
Internet traffic and data around the globe.

The company has extended the closing date for
institutional book-building process by a day, and the same will now end on
Friday. On Monday, it had extended the closing date for its IPO by three
days to Thursday. The institutional book-building period for the offer had
started on July 9.

The telecom major plans to use the proceeds from the
Singapore listing of GTI to pare some of its Rs 35,839 crore debts. Flag
Telecom was acquired by the then undivided Reliance Group for USD 207 million
(less than Rs 1,000 crore) in 2003. As part of the telecom portfolio of the
erstwhile Reliance group, Flag Telecom later came into the fold of Anil
Ambani-led group after the split between two Ambani brothers.

As of March 31, 2012, the company has a net debt of Rs
35,839.3 crore on its books.

In January 2012, Chinese state banks agreed to lend $1.18
billion to Reliance Communications to repay overseas convertible bonds due for
redemption on March 1, according to a report in

Industrial and Commercial Bank of China (601398.SS),
China Development Bank Corp, Export Import Bank of China and other banks
provided the refinancing of the foreign currency convertible bonds (FCCBs).

Last year, China Development Bank arranged a $3 billion
syndicated loan for the mobile firm and Reliance Power, also part of Anil
Ambani’s Reliance Group. That funding was used in part to buy Chinese telecom
and power equipment.

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