RCOM to offload stake in Flag Telecom

Reliance Communications (RCOM), the country’s second-largest wireless company, will adopt a three-pronged approach to unlock value for its shareholders.

RCOM will adopt a three-pronged approach to unlock value for shareholders and will also increase dividend payments to shareholders steadily.The company is in an advanced stage of selling a minority stake in Reliance Telecom Infrastructure India Ltd, its towers unit, to financial investors.

The company also plans to list the telecom tower unit on the local bourses. In the past four years, it has set up 14,000 towers and targeted 23,000 towers by the end of current calendar year.

Read more in The DNA Money article.

Flag Telecom buys US-based Yipes for $300mn

Flag Telecom, an Anil Dhirubhai Ambani Group company, has signed a definitive agreement to buy US-based Yipes Communcations for $300 million.

This was announced by Anil Ambani, chairman of the R-ADAG group in Mumbai a short while ago.Ambani said Flag will leverage its reach globally, and extend the reach of Yipes across the world.

Rel Comm to list Flag, tower biz in 6 months

Reliance Communications is looking at unlocking value for shareholders through an array of activities including listing its wholly-owned subsidiary, Flag Telecom, and the recently spun-off tower business. It has also earmarked a capital expenditure of Rs 10,000 crore for the current financial year.

Addressing the media today, Anil Ambani, chairman, Reliance Communications said: "We are looking at unlocking shareholder value through various modes like the listing of Flag Telecom and tower business or by roping in strategic investors and strategic partners or private equity majors. We will do this in the next six months."

Reliance Telecom Infrastructure was spun-off into a separate entity with the tower business in oder to reduce set-up and operating costs resulting in cost efficiencies and providing greater financial flexibility. It has 12,000 towers and a networth of Rs 3,000 crore. The company is planning to set up another 8,000 towers, increasing its total number of towers to 20,000 by next year.

Ambani said the expansion plans of the company would be funded through debt, “which would be non-recourse to Reliance Communications”.

The company has also announced a capital expenditure of Rs 10,000 crore for both CDMA and GSM operations. This would also include foray into 3G and 4G technologies, while the company is expecting releasing of spectrum by the end of this quarter.

Flag Tele listing on LSE soon

Flag Telecom, a 100 per cent subsidiary of Reliance Communication (RComm), has mandated Goldman Sachs and Deutsche Bank as lead managers for the maiden initial public offering (IPO) on the London Stock Exchange.ADAG is expecting to recover ten times the value paid for buying the company in 2002.

Flag, which runs an international fibre bandwidth all across the globe, has announced an investment of Rs 7,000 crore to set up a new generation network which will provide high speed transmission. The cash from the IPO will be used to partly finance the ambitious project which is expected to be up and running by 2009. The new network will link to the Mediterranean to Greece, Cyprus, Turkey, Malta, Libya and Lebanon, Trans-Pacific to the US and Japan, Far East and Africa.

Read more in The Business Standard article.