Flag seeks $500m from debt issue: report
Flag Telecom, the Reliance Communications’ group’s global carrier arm, is aiming to raise as much as $500 million through a bond issue, the Economic Times reported Monday.
The division has been on the sale block for the past year, without attracting any serious bids.
Now it appears to be following the path of Hong Kong-based Pacnet, which raised $300 million from the debt markets last month after abandoning an attempt to IPO.
Reliance Com has appointed Deutsche Bank to lead the Eurobond issue, the Economic Times said, quoting investment banking sources.
The fresh funds will go to paying off some of RCom’s debts.
India’s second largest operator has more than 300 billion rupees ($6.7 billion) in net liabilities, with $200 million in convertible bonds due next May and another $900 million in foreign currency convertible bonds (FCCBs), maturing February 2012.
The carrier reported its fifth successive decline in quarterly profit Friday.
Earnings in the September quarter sank 40% to 4.5 billion rupees ($99m), with sales down 3.9%. It added 6.5 million subs in the period to take its total to 117.3 million.
Revenue at the global group dived 18.8% to 18.4 billion rupees. The division posted ebitda earnings of 3.4 billion rupees.
The company bought the former UK-based Flag Telecom – one of the world’s first independent global fiber networks – in 2003 for $207 million.
Reliance Communications (RCOM) closed down 3.521% at 169.9 rupees Friday.
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