Reliance Communications Ltd, India’s fourth-largest telecom operator, which launched a share sale late Tuesday to institutional investors to raise around $500 million to deleverage the balance sheet, has reportedly closed a heavily oversubscribed issue within a day.
The company was planning to sell shares at a price of Rs 142.13 each, or a discount of 5 per cent to the floor price, through a private placement to qualified institutional investors, it had said in a filing to the stock exchanges on Tuesday. It, however, did not specify the number of shares being sold in the offering.
Reliance Communications said that it will separately raise around Rs 1,300 crore (or approximately $217 million) by issuing 86.7 million share warrants to its promoters, subject to required approvals.
Meanwhile, separate media reports citing sources said that the QIP has already been fully covered, having seen demand for shares worth around Rs 12,000 crore or 4x its size. The firm is said to have decided to retain Rs 4,800 crore or close to $800 million from the QIP. This makes it one of the biggest equity issues in recent times.
Coupled with the money to be inducted through the preferential allotment to the promoters the total quantum would top $1 billion mark.
The promoter or promoter group will be required to make payment of 50 per cent of the subscription amount on the date of allotment of the warrants, and the remaining 50 per cent will be payable on or before March 31, 2015.
As on March 31, 2014 the company had a net debt of Rs 40,178 crore, which makes it one of the most-leveraged listed Indian companies.
Its rival Idea Cellular followed a similar route and raised Rs 3,750 crore by selling shares of the company to institutional investors besides strategic investor Axiata Group of Malaysia.
Shares of Reliance Communications were last trading at Rs 149.70 per share, down 1.09 per cent from their previous close on the BSE.
(Edited by Joby Puthuparampil Johnson)