June 23, 2018

Reliance Jio Confirmed to Acquire Wireless Infrastructure of Reliance Communications

29 December 2017, 01:00 | Francis Delgado

Reliance Jio Confirmed to Acquire Wireless Infrastructure of Reliance Communications

RCom-RJio deal protects lenders’ interest SBI chief

The sale comprises of all spectrum, tower, fiber optic and other telecom infrastructure assets of Reliance Communications and is subject to government and other regulatory approvals, the statements said.

Since September 2016, Reliance Jio Infocomm Ltd has been laying the markers for the telecom sector.

Reliance Jio led by billionaire Mukesh Ambani will acquire mobile business assets of his younger brother Anil Ambani-owned Reliance Communications (RCom).

Reliance Jio emerged as the highest bidder after two rounds carried out by SBI Capital Markets on behalf of the consortium of lenders that were devising a statutory debt restructuring process for the company.

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RCom said the deal packs in 122.4 MHz of 4G Spectrum in the 800/900/ 1800/2100 MHz bands, over 43,000 towers, 1.78 lakh kilometres of fiber and 248 media convergence nodes. These assets are expected to contribute significantly to the large scale roll-out of wireless and fibre to home and enterprise services by Jio.

Since the last one month the market of RCOM picked up. This would see RCom, having a debt of over Rs. 44,000 crores, by bringing down its mountain of debt by Rs. 25,000 crores.

The deal consideration comprises of cash payment and includes transfer of deferred spectrum instalments payable to department of telecommunication. RCom Chairman Anil Ambani said Tuesday that his company aimed to reduce its liabilities from 450 billion rupees ($7.03 billion) to 60 billion rupees by March. "The company will utilise the proceeds of the monetisation of this cash deal exclusively for pre-payment of debt to its lenders", it said. The company is already undergoing a "robust" transformation to a business-business services company, Anil Ambani had said. After completion of all transactions, the balance debt in RCom is expected to be around Rs 6,000 crore only, representing reduction of over 85% of total debt. The collapse of the deal - which would have helped it cut its debt by Rs 14,000 crore - had resulted in another highly lucrative tower deal, with Canadian firm Brookfield that was getting in another Rs 11,000 crore, also breaking down.

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