RCom board gives in-principle approval to stake sale
Reliance Communications today decided in-principle to dilute 26 per cent equity in a strategic sale. The board's decision comes within two weeks of the Ambani brothers calling a truce and terminating the no-compete agreement of 2005 between the two Groups.business Updated: Jun 06, 2010 14:30 IST
Reliance Communications on Sunday decided in-principle to dilute 26 per cent equity in a strategic sale.
"The board of directors of Reliance Communications Ltd (RCom) has approved in-principle the induction of strategic/ private equity investors into the company for an up to 26 per cent equity stake at an appropriate premium to the prevailing market price," the company said in a statement.
The board's decision comes within two weeks of the Ambani brothers calling a truce and terminating the no-compete agreement of 2005 between the two Groups.
RCom shares have risen sharply over the past few sessions on reports that RCom has started talks with some foreign telcos, including MTN of Africa and UAE's Etisalat for offloading part of its stake to finance future expansion plans such as the rollout of 3G mobile services.
RCom has gained over 26 per cent and the scrip rose to Rs 168.15 on June 4 from Rs 133.40 on May 21 on the Bombay Stock Exchange.
The company spokesperson declined to comment on whether the company has received any offer from foreign mobile firms.
RCom's board has also decided to examine and pursue other appropriate strategic combination and consolidation opportunities.
RCom is the second largest mobile operator after Bharti Airtel with a net profit of over Rs 8,400 crore. The company claims to have a subscriber base of 109 million.
RCom offers mobile services on both GSM as well as CDMA platform throughout the country.
It may be recalled that talks between RCom and MTN in 2008 failed due to Mukesh Ambani staking claim to right of first refusal on stake in Anil Ambani group company RCom.