Batelco confirms talks to buy stake in Reliance unit
Manama, March 15, 2013
Bahrain Telecommunications Company (Batelco) is in talks with Reliance Communications to buy a stake in the Indian operator's enterprise business unit, the company said.
Batelco wants to expand abroad to offset declining domestic income and is keen to return to India, despite its former affiliate S Tel being one of eight mobile operators to lose their telecom licences last year as part of a corruption probe.
"We are in discussions with Reliance Group with respect to Reliance Globalcom," Batelco chief executive Sheikh Mohamed bin Isa al-Khalifa said in an emailed statement.
Separately, Peter Kaliaropoulos, Batelco Group chief executive officer for strategic assignments, told Reuters the talks were about buying a stake in Reliance Globalcom.
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.
Earlier on Thursday, the Times of India reported that Batelco and Reliance were in negotiations, saying the Bahraini operator had valued Reliance Globalcom at $1.3 billion.
The report also said Reliance would retain a minority stake should the deal be completed.
"At this point, there can be no certainty this will lead to a transaction," Sheikh Mohamed added.
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 km.
If 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