PE funds consortium in talks to acquire Reliance Globalcom

MUMBAI: Reliance Communications Ltd, India's third-biggest telecom company, today said it is in advanced stage of talks for selling a stake in its enterprise business unit to a consortium of PE funds that includes Samena Capital.

Anil Ambani Group firm, which was previously in talks with Bahrain Telecommunications Co ( Batelco) for selling a stake in Reliance Globalcom Ltd, hopes to conclude a deal with the consortium of PE funds by May-end, Reliance Communications (RCom) said in a statement.

The consortium, which also includes Providence and Carlyle, may buy up to 80 per cent in Reliance Globalcom which also owns the group's undersea cable business, for USD 1-1.2 billion, industry sources said.

The stake sale is expected to be used by RCom to lower its debt burden which stood at around Rs 37,000 crore as on December 31, 2012.

"Samena Capital, in a proposed consortium with certain other global PE funds, is at an advanced stage of the process of due diligence and completion of definitive documents in relation to the acquisition of Reliance Globalcom Ltd," RCom said in the filing to the stock exchanges.

It did not name the other members of the consortium and also did not say why its talks with Batelco did not go ahead.

The subsea telecommunications infrastructure network business of RCom has 46 cable landing stations in 26 countries and is one of the important cable system for facilitating Internet and other telecom services across globe.

Reliance Globalcom was previously in talks with Bahrain Telecom (Batelco) for selling stake in the subsea cable system but both the firms could not arrive at an agreement.

"RCom and Samena Capital are no longer in discussions with Batelco for the purposes of the above transaction," the statement said.

A Batelco spokesperson confirmed that "Batelco is no longer in discussions with Reliance regarding a direct or indirect investment in Reliance Globalcom".

Sources said the PE consortium has been preferred by RCom as it was offering better price and faster execution of the deal, which may be up to Rs 6,400 crore ($1 to 1.2 billion) in size.

On the discussion with PE Funds consortium, RCom said: "At this point, there can be no certainty that this will lead to a transaction. A further announcement will be made in due course, if and when appropriate."