Anil Ambani group firm Reliance Communications (RCom) will seek shareholders' approval for raising funds through the issue of securities. RCom is looking to garner funds to enhance its global competitiveness and strengthen its financial position, Reliance Communications said in its annual report.
As on March 31, 2010, the company had a net debt (excluding cash and cash equivalents) of Rs.24,856.95 crore ($5.5 billion).
The company is holding its sixth annual general meeting on Tuesday wherein it will seek its shareholders approval to issue, offer and allot equity shares at such time or times in one or more tranche or tranches, at par or at such price or prices to raise funds.
The aggregate amount raised by the issue of qualified institutional placement of securities as above shall not result in increase of the issued and subscribed equity share capital of the company by more than 15 per cent or up to $1 billion of the then issued and subscribed equity shares of the company, the report added. “The company needs cash. It has not even yet come out with the strategic investors for its dilution of 26 per cent stake,” CNI Research Chairman and Managing Director Kishore P. Ostwal told PTI. Early this month, a proposed Rs.50,000-crore deal to merge telecom tower assets of Anil Ambani group firm Reliance Infratel with GTL Infrastructure had failed to materialise. RCom had also proposed an IPO for Reliance Infratel, but there has not been any major development on that front ever since the proposed merger of tower business with GTL Infra.
In June, the board of the company had approved induction of private equity investors into the company for up to 26 per cent stake at an appropriate premium to the prevailing market price.
RCom had paid Rs.8,585.04 crore to the government towards securing the 3G spectrum. The company had bagged the spectrum in 13 circles, including Delhi and Mumbai. “The company had seen a huge cash outflow as the payment of 3G spectrum which it received from the Centre,” Mr. Ostwal added.
