THE UNDERSEA cable unit of India’s Reliance Communications has applied to list in Singapore, two sources with direct knowledge of the matter said yesterday, potentially raising between $1bn and $1.5bn to help its parent pare a heavy debt burden.
The unit will list as a business trust and has been keen to raise up to $1.5bn in what is set to be Singapore’s biggest IPO of the year, but sources involved in the process have said $1bn is a more realistic target.
A successful offering would be a major relief for beleaguered Reliance Communications, which has seen its fair share of failed deals. India’s second mobile operator, controlled by billionaire Anil Ambani, is struggling with $6.9bn in debt and has posted ten straight quarters of profit decline amid fierce competition.
The IPO is likely to be launched in the second quarter of 2012, said the sources, asking not to be identified. Sources have said previously that Reliance Communications plans to sell 75 per cent of the wholly owned unit in the offer.
The unit, which has hired Standard Chartered and Deutsche Bank as its main advisers for the offer, applied for the listing last week and is waiting for the Singapore Stock Exchange’s approval before it makes plans public, the sources said.
Another source said Industrial and Commercial Bank of China may have a bookrunner role in the offer. ICBC was not available for a comment.