Bahrain Telecommunications Company (Batelco) may be the latest suitor interested in purchasing an 80 percent stake in Reliance's Globalcom subsidiary for INR 60 billion (USD 1.09 billion), according to unnamed sources.
As reported in the Times of India, Reliance would like to use a potential sale of the Globalcom assets in addition to a $221 million deal to provide dark fiber for Reliance Industries' proposed 4G wireless network as a way to pay down more of its $7 billion of debt.
The service provider has had a tough time selling off its assets to pay down debts. Last July, it decided not to pursue an initial public offering of its Flag Telecom submarine cable unit due to what it says were "unfavorable" market conditions.
Under the terms of the proposed agreement, Reliance Globacom would retain a 20 percent stake in the company for the first year after the deal is closed with the option to sell that portion. Meanwhile, the Reliance Group's presence in the company would only be as an investor.
Officials from Reliance Group did not respond to the Times of India's request for comment. A spokesperson for Batelco later issued a statement, saying, "As we have informed the press in the past, there can be no certainty that any interest we expresses [sic] to Reliance Group will lead to a transaction. A further announcement will be made in due to course if appropriate."
Unnamed sources told the Times that the deal would is expected to be announced by the end of May.
If a deal does go through, Batelco would gain a far-reaching set of network assets, including a 65,000 km subsea telecommunications infrastructure network, enterprise services subsidiary Yipes in the United States, virtual network services provider Vanco in the UK, and Flag Telecom.
Last week, Batelco activated its Hawk submarine cable, giving it another 20 Tbps of capacity between Europe, the Middle East and India, as well as an alternate landing point on Cyprus.
For more:
- The Times of India has this article
- NDTV Online has this update
Related articles:
Reliance abandons IPO for FLAG submarine cable unit
Reliance IPO route to sell FLAG submarine unit not without challenges
Report: Reliance Globalcom could sell stake in its FLAG cable system
Reliance Globalcom employs Ciena for 40 Gbps submarine connection