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8:57 pm - Thursday April 26, 2018

Reliance Jio to buy all wireless assets of RCom

Agencies, Mumbai

The Anil Ambani-led Reliance Communications Ltd on Thursday signed “definitive binding agreements” to sell its wireless assets to Reliance Jio Infocomm Ltd, run by older brother Mukesh Ambani, both companies said in statements to the Bombay Stock Exchange and the National Stock Exchange.

The debt-ridden Reliance Communications will sell all spectrum, tower, fibre optic and other telecom infrastructure assets. The sale ends a 12-year rift between the two companies.

A feud between the brothers in 2005 led to the split of Reliance Industries – Mukesh Ambani kept the oil and gas business, while Anil Ambani took over telecom and power. On Tuesday, Anil Ambani announced that R-Com had non-binding offers from 15 firms for the sale, Reuters reported.

The deal will help the company cut its debts by Rs 39,000 crore. “Reliance Jio emerged the highest bidder in a transparent process conducted under the supervision of a high-powered Bid Evaluation Committee,” Reliance Communications said. Earlier this week, the debt-laden Reliance Communications had said that it will exit the strategic debt restructuring plan with a zero write-off to lenders.

Anil Ambani had said that the company would reduce debt by monetising its wireless business and selling land parcels that the company owns.

Ambani’s latest debt reduction plan comes after an earlier plan involving a merger with Aircel Ltd. and sale of its mobile towers business to Canada’s Brookfield Infrastructure failed to go through. Trouble mounted after shares of RCom fell below the agreed conversion price of Rs 24.71 per share.

In November, the Anil Ambani company also defaulted on its outstanding dollar bonds – the first such default by an Indian company in 15 months. However, Ambani, in the latest press briefing, assured investors that the “new” RCom will have a debt of just Rs 6,000 crore from around Rs 45,000 crore currently.

Posted in: Business, Featured

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