Will continue to focus on unlocking value: Reliance Comm

Reliance Communications has reported a 3% rise in its quarterly profit. Its consolidated net profit rose 3.2% to Rs 162 crore for its quarter ended June, from Rs 157 crore a year earlier. Revenue rose an annual 8% to Rs 5,319 crore.

In an interview to CNBC-TV18, Gurdeep Singh, president and chief executive officer-wireless biz and Punit Garg, president and chief executive officer-global & enterprise business of Reliance Communications, speak about the results. Below is the edited transcript of the interview with CNBC-TV18’s Sonia Shenoy. Q: What is the debt situation on the books like? What are the plans to deleverage the balance sheet? Singh: Our debt situation stands at Rs 35,600 crore. It has come down by Rs 200 crore. As far as our focus is concerned, we continue to focus on unlocking the value and optimising our interest cost. As and when we find opportunity, we will look at de- leveraging either through Flag or Reliance Infratel. However, at operating levels, we continue to be pre-cash flow positive. All our major projects are behind us. Any further capex, which is going into the organisation at this moment, is going from quality and capacity addition. We had stated as an annual Rs 1,500 crore guidance. We stick to that. Against that, Rs 369 crore has been invested in the last quarter. Q: What is the likely timeline of Flag Telecom IPO? Could you give us some details on the Reliance Infra stake sale? Flag Telecom IPO has been recently postponed because of poor market conditions. Will it take place in FY13 at all? Garg: We are waiting for supportive market condition and easing of prevailing global uncertainties to proceed with the offering and listing at an appropriate time in future. It is difficult to time the market. But in order to unlock the full value of Flag Telecom assets in the best interest of our two million shareholders, I guess that as and when we see that the market conditions are improving, subsequent update will be provided to stock exchange and relevant authorities in due course of time. As far as our Infratel transaction is concerned, we continue to engage with potential investors in order to complete this transaction. DOT and TRAI are working on spectrum auction and licensing guidelines. Once the clarity emerges on various pending regulatory issues including completion of auction process then this transaction will proceed further. Q: What is the response that it got from the investors? Will consider lowering the expected valuations? Garg: I think enthusiastic, positive response from all the investors is key to make investment in IPO. You haven't seen in the last couple of months any of such transactions going through. So, we are just waiting for the market sentiments to improve. It is nothing to do with the company’s expectation. I think it is in line with the market expectations, where we are in terms of our profitability. As we see especially the 3G, 4G, the video downloads and the data downloads, which are demanding more bandwidth within the country and when it comes to the intercontinental connectivity, I think investors are looking at that as a sunrise segment. They keen to find an opportunity to participate in that.