Bahrain Telecommunications Co (Batelco) today issued a statement saying there was "no certainty" that they will pick up stake in Reliance Communications' subsidiary Reliance Globalcom.
"As we have informed the press in the past, there can be no certainty that any interest we expresses to Reliance Group will lead to a transaction. A further announcement will be made in due to course if appropriate," a Batelco spokesperson stated.
The clarification came after reports that the telecom major may sell 80 per cent stake in its subsidiary Reliance Globalcom to a consortium led by Batelco. The deal is likely valued at around Rs. 6,000 crore, reports indicated.
Traders said a deal with Batelco will help Reliance Communications cut the large debt on its books. Huge debt has been the single biggest factor weighing on Reliance Communications' shares.
Reliance Communications in March had confirmed that that it was in talks with Batelco with respect to Reliance Globalcom. Reliance Globalcom provides communications services to more than 2,100 businesses, 200 carriers and 2.5 million retail customers in 163 countries. It also owns what it says is the largest private undersea cable system, spanning 65,000 kilometres.
Batelco is likely to take control of Reliance Globalcom by the end of May, the reports indicated.
Reliance Communications, India's No.3 mobile phone carrier by customers, had net debt of about $6.9 billion (Rs. 37,000 crore) as of December, or more than five times its annualised operating profit, making it the most-leveraged Indian phone carrier.
The reports came after Reliance Communications struck a Rs. 1,200 crore deal with the telecommunication unit of Reliance Industries last week.