Sources: Batelco may purchase a piece of Reliance Globalcom
Batelco, Bahrain's incumbent telco, has entered into talks to purchase a large stake in Reliance Globalcom, the business services subsidiary of Reliance Communications.
Reliance cautioned that talks are preliminary and it's possible that no deal will happen. "At this point, there can be no certainty that this will lead to a transaction," the service provider said in a statement.
Last July, Reliance decided to abandon its initial public offering of its FLAG submarine cable unit due to what it said were "unfavorable" market conditions. At that time, it hoped to generate between $700 million and $1 billion from the listing of FLAG via GTI Trust, a Singapore-based trust, on the Singapore stock exchange.
Citing unnamed people close to the talks, The Times of India reported that Batelco and a couple of Middle East funds estimate that Reliance Globalcom is worth about $1.3 billion. If a purchase does happen, Reliance said they would keep a minority stake in the subsidiary.
"They [Batelco] have been discussing this for several months now, with in-principle agreements on the broader aspects of the deal-making," a source told The Times of India. "The transaction is not imminent and a few months away depending on the pace of talks."
Globalcom's network assets include the FLAG submarine cable system and the U.S.-based Ethernet assets it purchased from Yipes.
In related news, Reliance Globalcom's submarine cable division has chosen Ciena's (Nasdaq: CIEN) GeoMesh system to upgrade its trans-Atlantic FA-1 South submarine network. Upgrading its submarine cable network routes has been an ongoing priority for Reliance. Working with Ciena, the service provider previously upgraded two of its key network routes: the FLAG Europe-Asia (FEA) submarine cable network and the Hawk network from Marseilles to London.
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