Reliance Exploring Stake Sale in Telecom Towers Arm
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Reliance Exploring Stake Sale in Telecom Towers Arm

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Mumbai: Reliance Communications will consider selling a stake in its telecom towers arm as part of a definite medium-term plan to reduce debt that has topped nearly $6.5 billion and unlock value for shareholders, chairman Anil Ambani said Tuesday.
The company will also look at listing its undersea cables business in Singapore sometime next near when the market conditions improve hoping to bring down significantly the debt levels during fiscal 2013-14, Ambani told a shareholders' meeting here.
"Hopefully, in 2013, we will also be able to conclude a value-unlocking strategy for Reliance Infratel," he said about the telecom towers arm, adding that he was hoping more clarity on infrastructure needs after the government concludes sale of airwaves.
The markets reacted positively to the announcements, resulting in the shares of Reliance Communications to jump 4.5 percent, or 2.15, to quote at 50.05 on the Bombay Stock Exchange (BSE).
The chairman said the company had spent much in the third generation telecom business and that over the next 18 months this investment should start yielding the desired results. "Data will lead the next wave of wireless growth in India," he said.
Ambani said going forward the focus will be on monetising the company's asset, increase revenue growth and enhance profitability to emerge among the lowest cost telecom service providers in India and most cost-competitive companies in the business.
"This will undoubtedly lead us to profitability and higher profits, which will improve our overall cash flow," the chairman said about the company, which has a customer base of over 150 million in more than 24,000 towns and 600,000 villages.
"We firmly believe -- we are committed to long-term shareholder values for all of you."
According to Ambani, the company's total debt was around 10 percent of the entire such exposure given to telecom companies in India, estimated at 300, 000 crore. He said his target was to cut it to 3 percent of its earnings before interest and tax.
"We have spent 10,000 crore, only on 3G, which is just two years old, and we have 18 years more for monetizing and creating a very large business for our 3G spectrum."

Source: IANS
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Reader's comments(1)
1: They sure need to improve their network coverage.
Posted by:Ahana - 04 Sep, 2012