Issued Date : 19- July- 2007
Reliance Communications Limited ("RCom") today announced that a group of leading international investors across the US, Europe and Asia, have agreed to purchase 5% of the equity share capital of its 100% owned tower company, Reliance Telecom Infrastructure Limited ("RTIL"), at an equity value of US$ 6.75 billion (Rs. 27,000 crore). The transaction has resulted in substantial unlocking of value for RCom's over 2 million shareholders. RTIL's equity valuation of Rs. 27,000 crore (US$ 6.75 billion) translates to approximately Rs. 135/- per RCom equity share, which is nearly 25% of RCom's current market price of Rs. 565 per share. The offering was heavily oversubscribed with a total order book in excess of US $ 2 billion. The transaction will result in a cash inflow of Rs. 1,400 crores (US$ 337.5 million), the benefits of which will flow to RCom and its shareholders.The capital gains arising out of the sale of the 5% stake in RTIL will be about Rs. 1,200 crore (US$ 280 million). RCOM's residual 95% stake in RTIL is valued at US$ 6.40 (Rs. 26,000 crore), and the company will pursue opportunities for further unlocking of value through an RTIL IPO and/or strategic sale at an appropriate time. Shri Anil Dhirubhai Ambani, Chairman, RCom, said "We are excited about the tremendous growth potential in the Indian telecom infrastructure business. Our strategy to create a separate company for infrastructure business has resulted in tremendous unlocking of value for RCom shareholders. RTIL, as an independent telecom infrastructure provider, has significant growth potential and is on track to become the leading player in India. RTIL will be listed in the near future and provide investors another attractive opportunity to participate in India's incredible telecom growth." JPMorgan acted as the exclusive financial advisor on this transaction. About RTIL: RTIL has entered into a 10-year Master Services Agreement with RCom and RTL, nominating RTIL as the exclusive provider of passive telecom infrastructure to RCom and RTL. Additional tenants in the form of external wireless operators on RTIL's towers will provide incremental growth for RTIL and thus provide significant operating leverage. ABOUT RCOM: Rated among "Asia's Top 5 Most Valuable Telecom Companies", Reliance Communications is India's foremost and truly integrated telecommunications service provider. The company with a customer base of over 35 million including over one million individual overseas retail customers' ranks among the Top 10 Asian Telecom companies by number of customers. Reliance Communications corporate clientele includes 600 Indian and 250 multinational corporations, and over 200 global carriers. RCom has established a pan-Indian, next generation, integrated (wireless and wireline), convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire Infocomm value chain, covering over 8,000 towns and 300,000 villages. Reliance Communications owns and operates the World's largest next generation IP enabled connectivity infrastructure, comprising over 150,000 kilometers of fibre optic cable systems in India, USA, Europe, Middle East and the Asia Pacific region. Disclaimer: Except for the historical information contained herein, statements in this Release which contain words or phrases such as "would", "will", "growth", etc., and similar expressions or variations of such expressions may constitute "forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. RCom and RTIL undertake no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. This transaction is subject to completion of definitive documentation.[ Top ] |
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