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CITIC to make a bid for RCOM cable business

28 Jul 2014

China’s CITIC Telecom International is planning to buyout Reliance Communications’ (RCOM’s) submarine cable unit, Global Cloud Xchange (GCX, previously known as Reliance Globalcom), for up to USD1 billion. CNBC quotes an unnamed source close to the sale as saying ‘CITIC Telecom has been talking to RCOM to buy a stake in GCX for some time but since GXC’s bond issue of USD350 million was due the deal got held up. Now that the bond issue has gone through, CITIC Telecom will begin due diligence. The deal is still in initial stages so will take some time to go through.’ According to the source, CITIC is looking to snap up only the subsea operations and has no interest in GCX’s voice business. RCOM has been looking to offload its cable arm since 2012 to help cut its debt, but has so far been unsuccessful, with an initial public offering (IPO) falling through in July 2012 due to unfavourable market conditions, and negotiations with potential buyers Bahrain Telecommunications Company (Batelco) and a consortium of private equity firms led by Samena Capital also coming to nought.

As noted by CommsUpdate last week, GCX has announced plans to deploy a 5,060km cable linking Mumbai and Singapore. The system, dubbed India Cloud Xchange (ICX) will allow the company to bypass the existing terrestrial routes connecting Chennai and Mumbai by circumventing the country’s coastline to link India’s west coast directly to Singapore. The network will be based on 100Gbps technology and is expected to be ready for service in Q2 2016.

China, India, CITIC Telecom International, Global Cloud Xchange (GCX, formerly Reliance Globalcom), Reliance Communications (RCOM)

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