RComm to cut debt with $1bn-Subsea listing

CNBC-TV18's Sajeet Manghat and Ashmit Kumar examine the prospectus of the GTI Trust and explain how the listing will be implemented to enable the raising of funds.

Also watch the accompanying video

Reliance Communications is all set to list its Subsea Cable Network through the GTI trust on the Singapore stock exchange and hopes to close the IPO by July 16.

As part of the listing, a restructuring process will be initiated by Reliance Globalcom BV, the sponsor of the IPO, to establish the GTI Trust and ownership structure for Subsea Telecomunication Network Business. GTI Trust will have shareholding in RGL India which in turn will be holding entities comprising the GTI Group.

Now, the GTI Group has four wholly-owned subsea cable systems with a total installed capacity of 15,160 Gbps and a subsea cable system in which the GTI Trust has an exclusive right to purchase capacity with a call option to purchase the subsea cable system in the future.

GTI says there is excess capacity in the subsea telecom infrastructure market. The GTI Group's market share on routes based on utilised capacity stood at 18.8% as on end of December 2011. As on March 2012, the total unused capacity stood at 14,605 Gbps or 75.1% of total capacity.