With service providers having deep interest in overseas connectivity, Reliance is set to sell half of its cable business to Citic Telecom.
Reliance Communications has initiated talks with Hong Kong’s Citic Telecom for purchase of 50 percent of stake in its undersea cable business. The deal is expected to fetch $500 million to $600 million for the company, which is expected to be used to raise funds to pare the existing debts incurred to acquire bandwidth and for expansion plans.
According to sources close to the company, the talks for a 50:50 JV for the cable assets have reached an advanced stages. The deal is expected to be completed in the next few weeks. This will help Reliance to clear part of the net debt which is currently pegged at Rs. 40178 crore after its finance costs rose from Rs. 749 crore to Rs. 907 crore.