Reliance Communications chairman Anil Ambani in Mumbai on Thursday. (Fotocorp)

Mumbai, Dec. 28: Reliance Communications (R-Com) is indeed interested in Hutchison Essar. The company wants to gain synergies in India’s telecommunications market and maximise shareholder value through the deal.

R-Com chairman Anil Ambani’s announcement came on the 74th birth anniversary of Dhirubhai Ambani.

“Reliance Communications, as part of its overall growth strategy, continuously examines several organic and inorganic opportunities of growth. Hutchison Essar is one such situation. The potential combination of this nature could create compelling value for stakeholders of R-Com,” he said.

Ambani added that R-Com was not alone in this endeavour and that it was finding support from other quarters too. He said the group had received exclusive financing support from global equity funds and banks.

“The commitments are more than what we can consume,” he said, adding that all the 10 top private equity players of the world had approached the group. This was an indication of the strong endorsement in R-Com and India’s telecom growth, he said.

Reports suggest Hutchison Whampoa is looking at a floor price of $14 billion for its 67 per cent stake, thereby valuing Hutch-Essar at a staggering $21 billion.

Ambani said R-Com would be conservative in its approach, hinting that there would be a point beyond which the group would not go to acquire the stake. “We have absolute clarity in our mind where the value creation will stop....we shall be well within our conservative limits,” he added. Ambani declined to give valuation numbers for Hutch-Essar, stating that the competitive nature of the business would not allow him to do so. Observers say R-Com’s bid could go up to $18 billion.

R-Com is planning to hive off its telecom infrastructure and wireless towers division, into a separate company. “We have called for a shareholders’ meeting on January 27 to get approval,” he said.

FLAG plan

Anil today announced an ambitious plan to expand FLAG Telecom’s (R-Com’s subsidiary) global optic fibre network at an investment of $1.5 billion (Rs 7,000 crore).

Over the next 36 months, FLAG Telecom will build the world’s largest IP network over submarine cable systems. Termed FLAG Next Generation Network (NGN), the project will cater to the growing telecom needs of over five billion customers across the globe.