[T.S.R:14750] Reliance Communication

 

Event Update (June 28, 2010)

Event Update Reliance Communication Reco: ACCUMULATE CMP: Rs201 Target Price: Rs228 Tower hive-off to improve BS health and unlock value · RCOM's agrees to hive-off 50,000 towers into GTL Infra in return for cash, debt transfer and equity in GTL Infra, to be decided later · EV of resultant entity at Rs500bn implies value of RCOM's towers at Rs348bn, i.e. EV/tower at Rs 7mn &EV/tenant at Rs 4mn · RCOM's net-debt/EBIDTA to reduce from 3.6x for FY10 to 2.2x post deal assuming debt transfer of Rs150bn along with towers · Upgrade stock from REDUCE to ACCUMULATE with target price Rs228 (v/s Rs152 earlier). Failure of successful deal completion remains risk Click here to read report: Event Update

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