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Reliance Communications unit files preliminary prospectus for Singapore IPO
(Reuters) - The undersea cable unit of India's Reliance Communications Ltd (RLCM.NS) filed a preliminary prospectus on Thursday for an initial public offering in Singapore, the company said, in a deal that could raise about $1 billion.
Reliance Communications, controlled by billionaire Anil Ambani, is looking to raise funds to ease a debt load of $7 billion as of March. It has been unsuccessful in several attempts to raise money by selling assets.
Shares in Reliance Communications, the second largest Indian cellular carrier by subscribers and fourth by revenue, closed 2.6 percent higher after the news.
Sources have said Reliance Communications plans to sell as much as 75 percent of its holding in the undersea cable unit. The unit will be listed as a business trust to be called GTI Trust.
The company plans to begin roadshows for the deal on Monday, said a source familiar with the deal. Before that, the company and its advisers will decide on an indicative price and yield ranges, the source added.
Initial feedback from investors suggested the unit will have to pay a yield of over 10 percent to sell the IPO to investors, sources told Reuters on June 21.
The business generated revenue of $267.5 million on a pro forma basis for the year ended March 2012, according to the preliminary prospectus filed. Reliance Communications expects the unit's revenue to rise to $287.6 million in fiscal year 2013 and $308.8 million in fiscal 2014.
Reliance Communications expects the unit's loss to narrow to $14.4 million in the current financial year from about $23 million pro forma loss in the previous fiscal year.
Deutsche Bank (DBKGn.DE), Standard Chartered (STAN.L), DBS (DBSM.SI) and Industrial and Commercial Bank of China (1398.HK) are the advisers for the public offering.
(Reporting by Devidutta Tripathy in New Delhi, Saeed Azhar in Singapore and Sumeet Chatterjee in Mumbai; Editing by Tony Munroe and Anand Basu)
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