RCom In Talks Over Enterprise Telecoms Sale
By Tom Mitchell, Simon Mundy and Don Weinland, Financial Times
March 21, 2018
Deal would end company’s 15-year presence in Indian communications sector
RCom, the heavily indebted company controlled by Indian tycoon Anil Ambani, is in talks over a sale of its business communications assets that could end its 15-year involvement in India’s telecoms sector.
Reliance Communications has suffered financial difficulties amid a price war launched by new mobile operator Reliance Jio, controlled by Mr Ambani’s older brother Mukesh. Last year RCom was forced to suspend repayments on its debt pile of $7bn, and has announced a series of asset sales.
In December, RCom announced it had agreed to sell most of its consumer telecoms assets to Jio, saying it would close its mobile arm and focus entirely on its remaining operation serving corporate customers. It also revealed it was seeking equity from “global strategic partners” by selling a stake in the business. Credit Suisse was appointed to advise on the sale.
According to five people close to the restructuring talks, the process has expanded to include the potential sale of RCom’s enterprise telecoms assets, such as its international submarine cable network as well as a fixed-line telecoms network and data centres in India.
Two of the people said that five companies had expressed interest in buying RCom’s remaining telecoms assets in a sale that could raise about $1.2bn. Potential bidders include I Squared Capital, a New York-based private equity firm. Four other companies have expressed interest in buying a subset of RCom’s assets.
PCCW, the Hong Kong telecoms firm controlled by Richard Li, and Russian conglomerate Sistema have considered acquiring assets but neither company has made a formal bid, three people with knowledge of the talks told the FT. They added that PCCW and Sistema were continuing to monitor the opportunity.