In discussion with PE to sell stake in Reliance Globalcom

Talks between Reliance Communications Ltd. (RCom) and Bahrain Telecommunications Co (Batelco) for acquisition of a majority stake in Reliance Globalcom, the global communications services business unit of RCom, have fallen through. RCom, on Saturday, informed the stock exchanges that it was no longer in talks with Batelco, without providing further details. On Thursday, the last trading day of the week, RCom stock closed with a gain of 4.87 per cent at Rs. 86.10. RCom also added that it was in talks with a private equity consortium led by Samena Capital to sell a majority stake in Reliance Globalcom.

“We note recent reports in the press and confirm that Samena Capital, in a proposed consortium with certain other global PE funds, is in at an advanced stage of the process of due diligence in relation to the acquisition of Reliance Globalcom Ltd,” RCom said in a letter to the stock exchanges.

“The intended time line for completion is end of May 2013. At this point, there can be no certainty that this will lead to a transaction. A further announcement will be made in due course, if and when appropriate. RCom and Samena Capital are no longer in discussions with Batelco for the purposes of the above transaction,” the letter said.

The letter did not specify the reason behind failure of talks with Batelco. Semina Capital is putting in place a consortium of private equity (PE) investors and sovereign wealth funds who are interested in acquiring stake in Reliance Globalcom. RCom was ealier negotiating with Batelco to sell up to 80 per cent stake in Reliance Globalcom including its undersea cable business. The move was to reduce RCom’s debt burden of over Rs. 37,000 crore.