India’s fourth-largest operator Reliance Communications raised $800 million from a share issue, according to Bloomberg.
The proceeds from the sale to institutional investors will be used primarily for repaying some of the company’s debts and deleveraging its balance sheet, the company said.
Reliance Communications, which is controlled by Anil Ambani, had net debt of $6.7 billion at end-March 2014.
The company received more than $2 billion of orders from investors in the sale that started yesterday (24 June).
It will also raise up to $217 million by issuing warrants to its founders, including Ambani.
In other debt-reduction moves, Reliance is also negotiating to sell a 50 per cent stake in its undersea cable business to China’s Citic, following a failed attempt at a flotation of the same unit and an unsuccessful private-equity sale.
It was reported earlier this year that the company was considering a split of its GSM and CDMA business, with the latter marked for sale.
And the company has also looked at selling a stake in its satellite TV business.
Worse still, it will face heightened competition when Reliance Jio Infocomm – controlled by brother Mukesh Ambani – launches a 4G service in 2015.
Reliance Jio Infocomm was a major bidder in the country’s spectrum auction earlier this year. In contrast, Reliance was not among the leading bidders, highlighting its debt pressures.