Reliance Communications completes 5% equity private placement in Reliance Telecom Infrastructure Ltd (RTIL)

Reliance Communications Ltd has announced that the Company has completed the private placement of 5% equity shareholding in its telecom infrastructure Company, Reliance Telecom Infrastructure Ltd (RTIL), at a valuation of Rs 27,000 crore ($ 6.75 billion).

The placement has been made to 7 leading international financial investors across US, Europe and Asia, including Fortress Capital, HSBC Principal Investments, Galleon Group, New Silk Route, GLG Partners, Quantum Fund (George Soros) and DA Capital.

The sales proceeds from the transaction amounting to Rs 1,400 crore ($ 337.5 million) have been received in full, and the Capital Gains of Rs 1,200 crore ($ 289 million) have been booked and will be reflected in the results of Reliance Communications Group in the current quarter, i.e. Q2 2007-08.

Shri. Anil Dhirubhai Ambani, Chairman, of the Company said "We are excited about the tremendous growth potential in the Indian telecom infrastructure business. Our strategy to create a separate Company for infrastructure business has resulted in tremendous unlocking of value for over 2 million RCOM shareholders.

RTIL, as an independent telecom infrastructure provider, has significant growth potential and is on track to become the leading player in India. RTIL will be listed in the future and provide investors another attractive opportunity to participate in India's incredible telecom growth."

RTIL's equity valuation of Rs 27,000 crore (US$ 6.75 billion) translates into approximately Rs 135 per RCom equity share. RCOM's residual 95% stake in RTIL is valued at US$ 6.40 Billion (Rs 26,000 crore). The Company will pursue opportunities for further unlocking of value through an IPO and / or strategic sale at an appropriate time.

Source : Equity Bulls

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