No certainty of deal but RCom confirms talks with Batelco

Reliance Communications confirmed on Friday that it was in talks with Bahrain Telecommunications Co (Batelco) with respect to the Indian operator’s enterprise business unit.

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“At this point, there can be no certainty that this will lead to a transaction,” Reliance Communications said in a statement, without elaborating further.

Batelco said on Thursday that it was in talks to buy a stake in Reliance Globalcom.

Reliance Globalcom offers managed network services to global enterprises like British Airways, Siemens and Virgin Megastores.

A report in the Times of India said Batelco, along with a few Middle East funds, have valued the Mumbai-based Reliance Globalcom at $1.3 billion.

The report also said Reliance would retain a minority stake should the deal be completed.

Reliance Communications, India’s No.3 mobile phone carrier by customers, had net debt of about $6.9 billion as of December, or more than five times its annualised operating profit, making it the most-leveraged Indian phone carrier.

Reliance Globalcom provides communications services to more than 2,100 businesses, 200 carriers and 2.5 million retail customers in 163 countries, according to the company’s website.

It also owns what it says is the largest private undersea cable system, spanning 65,000 kilometres.

f successful, this would be Batelco’s second major deal in a matter of months. In December, it agreed to buy Cable & Wireless Communications’ Monaco and Islands division, which owns stakes in telecom operators in 12 markets including the Maldives, Channel Islands and the Seychelles. That deal was worth up to $1 billion

Batelco owns Jordanian telecoms firm Umniah, 27 percent of Yemeni mobile operator Sabafon and minority stakes in internet providers in Kuwait and Saudi Arabia and is also active in Egypt, but 59 percent of its 2012 revenue came from its home market, which is deteriorating.

Domestic profit fell 32 percent in 2012, outpacing a 12 percent drop in revenue.

Reuters