Reliance rumored to be selling FLAG and Yipes assets

Shouldering large debt and ongoing capital expenditure for expanding its wireless GSM network in India, Reliance Communications needs some cash now. To obtain that cash, the conglomerate reportedly wants to sell its FLAG undersea fiber network and its Reliance Enterprise Solutions for about $3 billion in cash.

Over the years, Reliance has built itself a sizeable telecom services warchest. In 2003, Reliance Communications bought the FLAG submarine fiber network--which sells wholesale capacity and other telecom services to other service providers and large enterprises--for $207 million. This was followed by the acquisition of California-based Ethernet provider Yipes in 2007 and Virtual Network Operator Vanco in 2008.  

According to a Reuters article that cited three unnamed sources, Reliance has sought Deutsche Bank to be an advisor for the potential sale and any interested parties will have to submit their bid in late January. Deutsche Bank is apparently shopping the assets to Japan's KDDI in addition to U.S.-based AT&T and Verizon.

However, an unnamed Reliance spokesperson said these reports are false. "We vehemently deny these speculations and rumors," the spokesperson said.

 For more:
- Reuters has this article

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