Flag targets $500m through debt issue

Flag Telecom, the Reliance Communications’ group’s global carrier arm, is aiming to raise as much as $500 million (€366 million) through a bond issue.
The division has been on the sale block for the past year, without attracting any serious bids, but has now appointed Deutsche Bank to lead a Eurobond issue, the Economic Times said, quoting investment banking sources.
The firm appears to be following the path of Hong Kong-based Pacnet which raised $300 million from the debt markets last month after abandoning an attempt to IPO.
RCom will use the fresh funds to pay off some of its debts.
India’s second largest operator has more than 300 billion rupees (€4.8 billion) in net liabilities, with $200 million in convertible bonds due next May and another $900 million in foreign currency convertible bonds (FCCBs), maturing February 2012.
The carrier reported its fifth successive decline in quarterly profit Friday, with earnings down 40% to 4.5 billion rupees and sales down 3.9%.
Revenue at the global group dived 18.8% to 18.4 billion rupees. The division posted ebitda earnings of 3.4 billion rupees.
The company bought the former UK-based Flag Telecom – one of the world’s first independent global fiber networks – in 2003 for $207 million.
Reliance Communications (RCOM) closed down 3.521% at 169.9 rupees Friday.