RCom RCom puts Flag Telecom IPO on hold

[Xen]

Reliance Communications (RCom) on Friday put on hold the $1-1.5 billion initial public offering (IPO) of its underseas cable unit Flag Telecom in Singapore, in the wake of adverse market conditions.

The IPO was put on hold on a day when institutional book building was to close, sources said.

RCom was looking at listing Flag Telecom through a Singapore business trust, Global Telecommunications Infrastructure Trust (GTIT) on the Singapore stock exchange.
GTI Trust owns four subsea cable systems that carry internet traffic and data around the globe.

The telecom major had planned to use the proceeds from the Singapore listing of GTI to pare some of its Rs 35,839-crore debts.

Sources said RCom was not in a rush to sell the assets and could afford to wait for positive market conditions, as it had already refinanced its foreign currency convertible bonds of $1.2 billion in March with a long-term Chinese loan.

Flag Telecom was acquired by the then undivided Reliance Group for $207 million (less than Rs 1,000 crore) in 2003.


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[Xen]

Reliance in trouble. Flag Telecom cancels $1B IPO

Flag Telecom, a large international network operator that connected countries in Europe with Middle East and Asia with the U.S., is shelving its $1 billion dollar initial public offering. The cancellation is a huge set-back for its parent company, Reliance Communications, which has been desperately trying to reduce its $7 billion in debt. The IPO was seen as a way to quickly slash that debt. Reliance was looking to list Flag Telecom via Singapore-based business trust, Global Telecom Infrastructure Trust (GTIT) on the Singapore stock exchange.

The IPO market has been a bit of a mixed bag these days. While some of the more seasoned U.S.-based technology companies have managed to post good first-day results, the failure of Flag is a reflection of a weakened global economic environment. There is some disdain for older cable infrastructure, especially the kind owned by Reliance.


Reliance in trouble. Flag Telecom cancels $1B IPO — Tech News and Analysis