A Reliance Communications Ltd. unit which owns undersea cable assets is planning to raise $700 million to $1 billion through an initial public offering in Singapore, said a person familiar with the situation.
Global Telecommunications Infrastructure Trust is offering 642 million to 757 million units in a price range of $1.09 to $1.32 per unit, said the person, who declined to be named. Reliance Communications — India’s second-largest mobile-phone operator by number of users — declined to comment on the unit’s IPO plans.
A successful listing would take Reliance Communications closer to cutting its massive debt, which was $6.58 billion as at March 31, according to company data.
Standard Chartered PLC, ICBC Co., DBS Group Holdings Ltd., and Deutsche Bank AG are managing the proposed listing. This comes at a time when India’s telecom industry has been plagued with uncertainty caused by allegations of corruption in the allotment of cellphone-service licenses.
Earlier this year, India’s Supreme Court cancelled 122 such licences awarded in 2008 and held by several Indian and foreign cellphone-service providers.
India’s mobile-phone companies were already facing lower profits because of high competition in the industry. Also, these companies had bid billions of dollars to get third-generation cellphone-service licences. But lower-than-expected demand for these services has forced them to cut tariffs by 60% to 70% over the past month.
The upcoming IPO will be the second attempt by Reliance, owned by Indian billionaire Anil Ambani, to sell a stake in its undersea cable network. The network carries telecommunication signals across 65,000 kilometers spanning Asia, the Middle East, Europe and the U.S. When Reliance tried to sell this unit in 2009, it didn’t get the valuation it was seeking.