Mumbai, July 9: Global Telecommunications Infrastructure Trust (GTI Trust) — an entity formed by Reliance Communications (R-Com) — is looking to raise anywhere between $700 million and $1 billion through its initial public offering (IPO) in Singapore.
The offering is expected to bring down debt levels at R-Com from its current level of almost Rs 36,000 crore. R-Com is also planning to divest a part of its stake in the telecom tower business.
Sources said GTI Trust, which is structured as a business trust, will offer 642 million to 757 million units in a price range of $1.09 to $1.32 per unit. A business trust is a hybrid structure, which combines elements of a company with that of a unit trust and investors in a business trust will get units instead of shares.
It is learnt that GTI Trust is offering a yield of up to 11 per cent on the units in a bid to make its offering attractive to investors. The IPO, which opened today, will close on July 16 and it is likely to be listed on July 23. Officials of R-Com, however, declined to comment.
Standard Chartered Plc, ICBC, DBS and Deutsche Bank AG are managing the proposed listing.
The units will be listed on the main board of Singapore Exchange Securities Trading (SGX-ST) and it will be traded in dollars. Investors will have to apply for a minimum of 1,000 units.
In its preliminary prospectus filed with the Monetary Authority of Singapore (MAS), GTI Trust said it would give 90 per cent of its distributable free cash flows (cash generated from operations minus cash used in investing activities) to investors on a semi-annual basis. The distributable free cash flow had increased to $116 million for the year ended March 31, 2012.
The GTI Global network includes four wholly owned subsea cable systems with a total installed capacity of 15,160 Gbps. These subsea cable systems operate on six of the eight major global data traffic routes. It also has nine locations with over 85,000 square feet of space for data centres and telecommunications facilities in various countries that include the United States, the United Kingdom, France, Hong Kong and Taiwan.
The R-Com stock today witnessed profit booking and closed at Rs 66.75 on the Bombay Stock Exchange, down 2.63 per cent or Rs 1.80.