RCom’s leftover businesses draw interest from two buyers

RCom’s leftover businesses draw interest from two buyers
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New Delhi, Sep 26: Two buyers, including a consortium of four funds, have evinced interest in buying or taking a controlling stake in the leftover businesses of Anil Ambani group’s embattled telecom arm, Reliance Communications (RCom), a top company official said Wednesday.
The company which exited the flagship wireless businesses due to financial pressures and is also selling its spectrum, is looking to sell off the enterprise-focused offerings including subsea cables, international fixed line and data centres businesses.
“We also do have two strategic buyers that are looking at the company today as we speak. We will see where it can go over the next few months,” RCom’s chief executive officer, Bill Barney, told reporters here.
He said the buyers will look for either a 100 per cent buy or at least a controlling stake. The company is optimistic of having a networth of USD 1 billion, he said.
At the company’s annual general meeting earlier this month, Ambani had announced that RCom will be completely exiting the telecom business to concentrate on real estate in future. The proceeds from the sale will go to its creditors, he had said.
“Our chairman talked about essentially exiting or withdrawing from the telecom business. He’s not going to do this tomorrow, it is going to happen over a time. It may be months, may be years,” Barney said.
He said the two potential buyers will take time for the due diligence, given the unfolding events which have now reduced it to a fraction of the original business.
The two buyers include a consortium of four funds which have come together for the bid, he said.
Despite the plans to exit, Barney said the company will continue with its investments, pointing out that it plans to invest USD 100 million in an undersea cable running from Italy to Hong Kong via India. He did not specify the timeline for the investment.
It is building its 10th data centre and will add three more in the next three years, he said, without mentioning the exact amount to be invested. The company is also seeking partnerships in other businesses, he said.
Barney said the company has sufficient capital to take care of the investments.
RCom had to be dragged into the strategic debt restructuring (SDR) after it failed to meet its debt repayment commitments to a group of over dozen banks including Chinese lenders to which it owes nearly Rs 45,000 crore.
Under severe financial pressure, the company exited the consumer-facing flagship wireless business late last year and also announced a sale of its spectrum assets to Reliance Jio, whose entry has severely affected the telecom sector.
Barney said the ‘new RCom’ will have a 10th of employees of the original, will serve 10,000 customers and have a debt of Rs 2,800 crore.
The RCom scrip rose reacting to the announcement and closed 11.26 per cent higher at Rs 12.85 a piece on the BSE Wednesday, against a 0.30 per cent correction in the benchmark.