Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now

You can switch off notifications anytime using browser settings.
Stock Analysis, IPO, Mutual Funds, Bonds & More

RCom's leftover businesses draw interest from two buyers

“There are two strategic buyers and we are in the process of discussions but timelines have not been finalised yet. It will be a controlling stake sake which could go up to 100%,” said Bill Barney, CEO, RCom.

, ET Bureau|
Updated: Sep 26, 2018, 08.11 PM IST
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.
Reliance Communications (RCom) is in talks with two strategic buyers to sell a controlling stake in its leftover businesses such as data centre and India enterprise and Global Cloud Xchange (GCX), which runs undersea cable networks, a top official said.

“There are two strategic buyers and we are in the process of discussions but timelines have not been finalised yet. It will be a controlling stake sake which could go up to 100%,” said Bill Barney, chief executive of RCom and GCX, at a news briefing.

Barney added that one of the buyers is a consortium of four funds and that the company is optimistic of attaining a net worth of $1 billion.

Shares of RCom, which is trying to pare its Rs 46, 000 crore debt by selling and wireless and land assets, closed at Rs 12.90 apiece, up by 11.69% on the BSE on Wednesday.

RCom and its subsidiary have come up with a transformation plan wherein the companies will be undertaking expansion of their fixed-line communications, data centre, subsea cables and enterprise services globally, Barney said. This includes an investment of $100 million from RCom to strengthen the undersea cable business which will run from Italy to Hong Kong via India and will cost $600 million in all.

Although he did not specify the timelines, Barney said the company has sufficient capital to take care of the investments.

RCom, which could not survive the brutal competition in the market and shut down its wireless business last year, is undertaking a series of key initiatives to enhance network infrastructure, processes and people capabilities. There are plans of expanding connected data centres across key hubs in India, including Bengaluru, Hyderabad and Chennai, the Anil Ambani-owned company said on Wednesday.

On the anvil are also three new data centres which, when added to the 36 small centres and nine large data centres, is expected to strength the company’s portfolio of cloud capability, Barney said.

“We have lined up key cloud provider partners to further leverage our facilities as aggregation points across India,” added Barney. The CEO said the 'new RCom' will have a 10th of the employees of the original to serve 10,000 customers and have a debt of Rs 2,800 crore.

RCom is selling its assets to Reliance Jio Infocomm (Jio) and Canadian asset management company Brookfield for Rs 18,000 crore. While the telco has managed to sell its fibre and nodes to Jio, it is stuck in a legal tussle with the telecom department over spectrum dues and till that is cleared, the spectrum sale to Jio cannot happen

At the company's annual general meeting earlier this month, Ambani had announced that RCom will completely exit 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 time. It may be months, may be years,” Barney said.
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links

Follow us on

Download et app

Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service