Reliance Communications Said to Sell $800 Million of SharesGeorge Smith Alexander and Fox Hu
Billionaire Anil Ambani’s Reliance Communications Ltd. raised about $800 million from a sale of shares to institutional investors, people with knowledge of the matter said.
The company received more than 120 billion rupees ($2 billion) of orders in the sale that started yesterday, said one of the people, who asked not to be identified as the deliberations are confidential. Reliance Communications will also raise as much as 13 billion rupees by issuing warrants to its founders, it said in a stock exchange filing yesterday.
India’s fourth-largest telecom operator is selling stock to help reduce net debt that doubled to 402 billion rupees in the four years through March 31, according to a presentation on its website. It joins Idea Cellular Ltd. in raising money as the country’s equity market surges following Narendra Modi’s election victory last month.
“This will improve their finances,” Harit Shah, a senior analyst of Nirmal Bang Institutional Equities, said by phone from Mumbai. “The capital markets are more favorable, so they can sell shares and reduce their debt.”
The shares will be sold at 142.13 rupees each, according to yesterday’s filing. Reliance Communications received shareholder approval in August to sell new stock equivalent to as much as 25 percent of its capital.
Reliance Communications shares fell 2.6 percent to 147.50 rupees as of 10:55 a.m. in Mumbai. The company declined to comment in an e-mailed statement.
Axis Bank Ltd., CLSA Ltd., Edelweiss Financial Services Ltd., JPMorgan Chase & Co. and Macquarie Group Ltd. arranged the sale, the people said. Long-only funds from the U.S. bought a major portion of the offering, according to one person.