Indian firm seeks London listing

Reliance Communications, one of India's largest telephony company, is planning to separately list its wholly owned subsidiary Flag Telecom on the London Stock Exchange, a report from The Times of India, said.

The report said the company plans to divest up to 24% stake in Flag Telecom, which operates and manages undersea cables, to raise over $500 million.

Though a spokesperson declined to comment on the development, reliable sources said that Reliance will initiate the process for listing the company in four weeks, the report added.

The proceeds from the listing will be used to fund a proposed $1.5 billion expansion in laying an additional 50,000 km of next generation network over the next three years.

The expansion is planned as global demand for Internet services continues to explode, Reliance said.

Increasing use of undersea cable for video and Internet data services has pushed up the demand for cable network in the last eighteen months.

If the listing goes through, it will be the second coming for Flag Telecom in an international exchange. Flag Telecom was earlier listed in the Nasdaq and London Stock Exchange but was de-listed after Reliance bought 100% of its outstanding shares in January 2003, the report further said.