India’s third-biggest mobile phone operator by customers, Reliance Communications (RCom)Ltd’s talks with potential partners for selling a stake in a unit that includes its undersea cable assets are in progress, chairman Anil Ambani told shareholders on Tuesday.
He did not name any possible suitor. The company said in April it was in talks with a private equity consortium that included Samena Capital for the stake sale, after talks with Bahrain Telecommunications Co (Batelco) fell through.
Hopeful of getting a banking licence for ‘Reliance Bank’, Ambani also said this proposed venture will help lower Reliance Capital’s debt to one-fourth of current levels and would be listed as a separate entity with an IPO after three years.
Addressing shareholders of Reliance Capital, the group’s financial services arm, Ambani also exuded confidence in the long-term growth potential of the proposed bank as a “profitable institution in itself”.
Replying to queries about possible listing of various subsidiaries of Reliance Capital, Ambani said that the parent company would remain a listed entity and there was no proposal to list any other entity. “As and when we get the licence and when the three-year period lapses, at that stage, as per the regulations there will be an IPO and we will list Reliance Bank,” he said. The licences are expected to be finalised in 2014.
Ambani said the banking foray would reduce Reliance Capital’s consolidated debt from Rs 20,000 crore to Rs 5,000 crore, due to transfer of its commercial finance business to the proposed bank.