According to a Reuters report this morning, the submarine cable unit of Reliance Communications has filed for an IPO — but not in the US, but rather in Singapore as was rumored two months ago. This is of course the FLAG group, which is part of Reliance Globalcom. It is not yet clear precisely what parts of Reliance Globalcom will go into the IPO and what parts won’t.
Reliance’s FLAG cable systems include the transatlantic FA-1, the Europe-Asia link FEA, the Middle Eastern FALCON, and the North Asian loop FNAL. They have several other projects at different stages of development in the Mediterranean and the Pacific. Along with FLAG, Reliance Globalcom also consists of the Yipes metro assets in the US and UK-based VANCO as well as some other assets in and around India.
Reliance Globalcom’s parent has been trying to use these assets to raise cash via various methods since over two years ago when rumors first emerged that Reliance Globalcom was for sale. But they were unable to find buyers willing to meet their price, and after exploring their list of options at length it seems they’ve found the least unattractive one and are finally going to pursue it.
Reliance supposedly hopes to raise $1.5B via the Singapore IPO, but I don’t think anyone seriously expects them to get near that. However, we don’t really have a good idea what the financials look like yet, so it’s premature to say much more than that. It also isn’t yet clear how big a stake Reliance will keep (75% remains the rumor), which as you might expect will have a big effect. Once they go public with their IPO plans we will likely get some more concrete details.
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