UPDATE 1-DEALTALK-Few call for Reliance Comm global asset sale

* Reliance Comm asset sale drawing scant interest - sources

* Company seeks $3 bln for FLAG, other units - sources

* Complaints include high valuations, big debt - sources

* Company denies it is trying to sell the assets

* NTT, ST Telemedia said to be interested - source (For more Reuters DEALTALKs, click [DEALTALK/]) (Adds Reliance Communication’s reiterated denial in para 9)

By Devidutta Tripathy and Doug Young

NEW DELHI/HONG KONG, Feb 2 (Reuters) - More than a month after putting its biggest global assets up for sale, India's Reliance Communications RLCM.BO has found few callers for a package that includes its prized FLAG undersea cable network.

Sources close to the deal said Reliance Comm had already extended an initial deadline of late-January for submissions once, but had still attracted little interest for the deal seeking $3 billion.

The sources spoke on condition of anonymity because of the sensitivity of the situation.

One source said Singapore Technologies Telemedia - which owns stakes in Singapore's StarHub STAR.SI and undersea cable operator Global Crossing GLBC.O -- is contemplating a bid.

A spokeswoman for Singapore Technologies Telemedia, a fully-owned unit of state investor Temasek [TEM.UL], declined comment.

The source added that another company said to have expressed interest was NTT Corp 9432.T, though an NTT spokesman said the company was not considering a bid.

Sources said complaints surrounding the deal, being shopped by Deutsche Bank DBKGn.DE, include a dearth of financial information, concerns about debt and over-abundance of the kinds of assets and services being offered.

“It is no longer something which is in short supply,” said Arun Kejriwal of Mumbai-based investment advisory firm KRIS. “Earlier you thought you cannot do without a cable system of your own. But now it’s not the case. You can hire whatever you want.”

In a statement to Reuters, Reliance Comm denied it was trying to sell any assets from its global unit, Reliance Globalcom, but pointed out that a total of 150.9 billion Indian rupees ($3.26 billion) worth of investment has gone in the global business through December 2009.

Sources and documents obtained by Reuters show the assets are up for sale.

In a statement previously, the company had said FLAG, the undersea cable network operator, spans 65,000 kilometres and described it as the world’s largest private undersea cable system.

Three of the main assets in the sale package are FLAG, which Reliance Comm bought for $207 million in 2003; Yipes, a California-based ethernet service provider purchased in $300 million in 2007; and Vanco, a British telecoms services provider purchased for $77 million in 2008.

All three were struggling when Reliance Comm bought them, with FLAG purchased directly out of bankruptcy and Yipes acquired from a third party that took it over out of bankruptcy.


A source close to the deal said many potential buyers were scratching their heads at Reliance Comm’s asking price, said to be around $3 billion, for assets it collectively purchased over the last seven years for less than $600 million combined.

“How could they possibly believe the thing is worth five times what it was four years earlier?” the source said.

Two other sources close to the deal said the company, controlled by billionaire Anil Ambani, has ruled out selling the assets to a local rival such as Bharti Airtel BRTI.BO, due in part to the fierce rivalry among India's top business families.

“The reason they don’t want to sell it to a Bharti is because if Bharti turns around the business and does a better job with it, it’s a big embarrassment for Reliance,” said one source.

Reliance Comm is looking to unload the business as revenue at its global division fell 12.5 percent in October-December from the previous quarter to 19.82 billion rupees ($428 million). Revenue at the unit rose 20 percent sequentially in the previous quarter.

With such figures hardly reassuring, some potential buyers have complained that Reliance Comm has been particularly parsimonious with the financial information it is willing to give out, and is being overly optimistic about its financial projections.

“They’re making you base your bids on supplying you with six or seven numbers,” said one of the sources. “They give you almost nothing to go on. No cash numbers. It’s very limited information.” ($1 = 46.25 rupees) (Additional reporting by Michael Flaherty; Editing by Anshuman Daga)