Reliance Globalcom no Longer for Sale, CEO Says
March 7, 2014 3:10 PM EST
Reliance Globalcom, the international unit of Reliance Communications Ltd (RLCM.NS), is no longer up for sale and may raise debt or equity to fund its expansion plans, Globalcom's newly installed chief executive said.
A shareholder speaks on a mobile phone while attending the annual general meeting of Reliance Capital in Mumbai September 27, 2011.
The sale had long been mooted to help reduce debts at Reliance Communications, India's No.4 mobile operator, but Globalcom chief Bill Barney told Reuters: "There's no 'For Sale' sign up on the company".
Barney was appointed in January, one of a number of senior hires as part of its efforts to reshape the company, which says it has the world's largest privately owned submarine cable network.
"We'll go to capital markets when we need it, it may be in the form of debt, it may be equity," said Barney in an interview in Dubai, where he was attending a conference.
Barney's comments come nearly a year after the collapse of talks between Reliance Communications and Bahrain's Batelco BTEL.BH over the potential sale of a stake in Globalcom.
At the time, the parent firm said it had instead began similar discussions with a private equity consortium.
Since then, executives including Reliance Communications Chairman Anil Ambani have said there were talks with potential partners on the sale of a stake in Globalcom, without naming any suitor, and as recently as February reiterated a sale was still on the agenda.
The talks had followed a botched Singapore stock market flotation of the undersea cable assets in 2012 and were seen as crucial to cut the parent's debts.
"The markets are great right now, if we could list it we probably would, but we have a lot of projects we want to do to make it look stronger and faster," said Barney, who before joining Globalcom was chief executive of Pacnet , an Asian telecom provider which owns about 46,420 kilometres of submarine cable infrastructure as well as data centres.
With $6.5 billion of net debt, or more than five times its annualised operating profit, Reliance Communications is the most leveraged among listed Indian telecommunications carriers and has in the past unsuccessfully attempted to raise money by selling its telecom tower assets.
Reliance Communications could not immediately be reached for comment on Barney's remarks and whether it is looking at other debt-cutting plans.
Barney said his remit was to better integrate Globalcom's three main business strands: the Flag submarine cable network, U.S.-based web services provider Yipes and European virtual network operator Vanco.
Globalcom, which bought these units in 2003, 2007 and 2008 respectively, provides communications services to more than 2,100 businesses, 200 carriers and 2.5 million retail customers in 163 countries.
"In the next four to eight months we will bring the company together as a single company, focusing more on IP (internet)services (and) 'cloud' services, in addition to our cables, which have been critical, but if you think where the Internet is going, it's largely around fibre and cloud," said Barney.
"We'll expand quickly into new services and expand our footprint into key markets around the world."