BackRCom rallies on stake sale plan
RCom rallies on stake sale plan
PremiumNew Delhi: Shares in Reliance Communications rose for a fourth session on Monday, briefly erasing their losses for the year, after the company’s board approved selling up to 26% stake at a premium to its current market price to strategic or private equity investors.
The No.2 Indian mobile carrier did not disclose any timeframe or details for a possible deal in its statement on Sunday, but media reports have linked Abu Dhabi’s Etisalat, South Africa’s MTN and US phone firm AT&T as the potential partners.
MTN has denied it was not in talks with Reliance, while AT&T declined to comment on a Wall Street Journal report on Monday that the companies had talked about a potential transaction.
Also read:Board nod to RCom for 26% stake sale
RCom shares were up 2.5% at 9:40am, in a Mumbai market that was down 2.3%, having risen as much as 6.5%. At Monday’s high, the stock had gained 29% in the last four sessions.
More than 2 million RCom shares changed hands in early deals on Monday -- equivalent to their full-day average trading volume for 30 days.
Reliance Comm, controlled by billionaire Anil Ambani, had net debt of Rs19,900 crore ($4.2 billion) at the end of March and last month paid Rs8,585 crore for third-generation (3G) licences in an auction that was far more expensive than had been forecast. A stake sale would help it cut debt.
The company, which is the the only major Indian mobile player without a foreign strategic investor, also said that its board had approved pursuing other “appropriate strategic consolidation opportunities".
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