Reliance Communications, India?s second-largest mobile phone operator, is in talks with TPG Capital and Carlyle Group for purchasing stake in the company. Other potential investors interested in the deal include Blackstone Group LP (BX) and London-based Apax Partners LLP.
Anil Ambani, major stakeholder of the company plans to reduce the debt in a year. The company plans to sell about 50,000 telephone towers of the company. According to analysts, the selling will have positive impact on the profit of Reliance Communications. The tower business will then move to operator-owned business and also attracts tenancy. After the announcement, the share price moved to 93.9 rupees in Mumbai.
The benchmark Bombay Stock Exchange Sensitive Index, or Sensex, however, dropped 0.2 percent. Analysts consider the stock as the worst performing stock in the current year. The company had earlier received several indicative offers from several interested companies for their Infratel unit last month. The company is in the process of making the sale process to the next level. The sale will prevent the company from borrowing 87 billion rupees to refinance the purchase of third-generation airwaves and buy equipment.
However, early this year the company scrapped off a deal to sell its business to GTL Infrastructure Ltd. At the end of March this year, company?s debt exceeded its cash and equivalents by 320 billion rupees compared with 199 billion rupees a year earlier.