RCom to conclude Globalcom deal by month-end

The company had last month said discussions for sale of its subsidiary, with Bahrain-based Batelco, have failed

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Reliance Communications, which is currently negotiating a deal to sell stake in its subsidiary, Reliance Globalcom, said that it could conclude by the end of this month.

In an interview to a television channel, Gurdeep Singh, president of wireless busioness at RCom said that they are in advanced discussions with Sameena Capital, along with other consortium partners. He also said that currently they are engaged in advanced discussions and due diligence, along with documentation.

Last month, the company had said discussions for the sale of its subsidiary, with Bahrain-based Batelco, have failed. But, the company had then said, that talks were on with other private equity funds.

Reliance Globalcom holds the sub-sea cable assets of the telecommunications company, and has been trying to monetise assets, to pare down its debt. Its net debt stood at Rs 38,864 crore, as on March 31, 2013.

Reliance Communications had tried to raise capital via an initial public offer of its sub-sea cable assets in Singapore, last year. The plan however could not go through due to lack of investor interest.

After failing to monetise many assets including tower business sale, to stake sale in the parent company over the last three years, RCom managed to sign a deal with Reliance Jio Infocomm owned by Mukesh Ambani, last month. Jio would use RCOm's fibre infrastructure to offer its own 4G services, in an indefeasible right to use (IRU) for a fee of Rs 1,200 crore.

In an analyst conference call today, Singh also said that they have budgeted Rs 1,500 crore towards capital expenditure during 2013-14. “It is mainly on enhancing coverage & data capacity on its 2G, 3G and High Speed Data network, building additional capacity in data centers, providing fiber optic backhaul on greater number of sites,” he said.

RCom's stock went down by 4.8% to Rs 105.7 in today's trade as per data available on the Bombay Stock Exchange. Last Friday, the company posted an 8.7% drop in fourth quarter net profit to Rs 303 crore, from Rs 332 crore in the same quarter, last year.