RCom Negotiating with Two Investors; Anil Ambani Looking to Sell Controlling Stake
Anil Ambani’s Reliance Communications Ltd. (RCom) is looking to divest of its B2B connectivity services, data center, and Global Cloud Xchange Ltd. its undersea cable unit, and Ambani wishes to give up controlling stake in the company. RCom share prices have been falling since the company first announced plans to restructure its looming debts. Compounding the need to take drastic action was the fact that several lawsuits had been filed against the company by vendors who had not been paid, and overall, the company suffered from a mismatch of debts and market share, the latter of which dwindled as it fought to keep pace in a fierce price war with competitors. Part of the solution was said to come from its initial sale of towers, underground fibre cables, transmission nodes and airwaves to Reliance Jio Infocomm Ltd., the company spearheaded by his brother, Mukesh Ambani.
Bill Barney, RCom CEO said that there were currently two investors who had expressed interest in the sale, and that they were conducting due diligence. He did not name the parties, however. He did not mention the price point that was in consideration, only saying that more concrete news on this front would be known in a few months’ time. Earlier this year in June, Nomura Holdings Inc. had mentioned that three bidders were in the running for the assets that would be sold.
Additionally, Reliance Infrastructure Ltd. had sold off assets linked to power distribution in Mumbai, and managed to reduce its total debt by more than 65% percent.