Update: In a statement to the stock exchanges, Reliance Communications has said that Batelco is no longer in discussions with RCOM and Samena Capital for the acquisition of Reliance Globalcom, but RCOM is in talks with Samena Capital, as a part of a consortium with global PE funds:
“We note recent reports in the press and confirm that Samena Capital, in a proposed Consortium with certain other global PE funds, is at an advanced stage of the process of due diligence and completion of definitive documents in relation to the acquisition of Reliance Globalcom Ltd., our global communications services business unit. The intended time line for completion is end of May 2013. At this point, there can be no certainty that this will lead to a transaction. A further announcement will be made in due course, if and when appropriate. RCOM and Samena Capital are no longer in discussions with Batelco for the purposes of the above transaction.”
April 8th: Telecom operator Reliance Communications (RCOM) is looking to sell 80% stake in its subsidiary Reliance Globalcom to a consortium led by Bahrain Telecommunication Company (Batelco) for around Rs 6,000 crore, reports The Times Of India. The report states that RCOM plans to pay off a part of its debt through the money it will receive from this transaction.
Citing sources, the report states the deal is expected to happen by May end and following this deal, Batelco will have the management control of Reliance Globalcom, while RCOM hopes to pay off a part of its debt through the money it will receive from this transaction. It also added that RCOM will continue to own 20% stake in the company, however the company will reportedly have an option to sell that stake after one year. The Reliance ADA group has, however, declined to comment on this deal to the publication.
This report follows a similar TOI report last month, which had suggested that Batelco was in talks with RCOM to acquire a controlling stake in Reliance Globalcom, with RCOM retaining a minority stake in the company. A day later, RCOM had confirmed this development through a BSE filing on March 15, 2013, stating that it was indeed in talks with the Batelco group for a stake sale of Reliance Globalcom, however the company had informed that there was no certainty these talks would lead to an agreement and it will make a further announcement at an appropriate time.
Started in 1990 as Flag Telecom, Reliance Globalcom is a global managed network and communication service provider to carriers, ISPs and Multinational enterprises. It claims to serve around 2100 enterprises, 200 carriers and 2.5 million retail customers in 163 countries across six continents. It also claims to have a private undersea cable system of 65,000 kms which is integrated with Reliance Communications’ domestic optic fiber which spans across 190,000 kms.
Batelco Re-Entry To India
In 2009, Batelco had previously formed a special purpose vehicle with Dubai based Millennium Private Equity to acquire 49% stake in S Tel for $225 million in 2009, wherein the company had invested $175 million with the rest being invested by the PE firm.
S Tel had secured 2G licenses in six circles including Himachal Pradesh, Jammu & Kashmir, Bihar, Orissa, Assam, and the North-East and had launched its GSM service in December 2009. However, its licenses were revoked as part of a Supreme Court judgement which had revoked 122 licenses across 22 operators in February 2012. Following this judgement, Batelco had exited from the venture by selling out its entire 42.7% stake in S Tel to Sky City Foundation Ltd for $175 million in February 2012.
In January 2013, Batelco had stated plans of re-entering India through a telco acquisition. Batelco CEO Sheikh Mohamed bin Isa Al Khalifa had said that they were not interested in participating in the 2G auctions to secure licenses and set up a new joint venture in the country but instead they plan to enter the country by investing in existing telcos.