12 years on, Mukesh gets back RCom in pieces

BT Podcast Reliance Jio to buy RCom assets e-commerce industry to grow

Billionaire Mukesh Ambani-led Reliance Jio Infocomm Ltd will buy all the wireless assets of younger brother Anil Ambani's Reliance Communications Ltd, the two companies said on Thursday.

The chairman said that the debt resolution will see RCom in leaving the SDR framework with no conversion of debt into equity and zero write-off by lenders and also said that he further expects full closure by March 2018.

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

An asset monetisation process for Reliance Communications assets was mandated by the lenders of RCom, who appointed SBI Capital Markets Limited to run the process.

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As part of the deal, Reliance Jio will acquire spectrum, tower, optical fibre network and other wireless assets of RCom. "These assets are strategic in nature and are expected to contribute significantly to the large scale roll-out of wireless and Fiber to Home and Enterprise services by Reliance Jio", the statement added.

After the transactions, RCom is expected to gain from the sale, the proceeds of which will be used for the company's debt reduction. While the companies are yet to announce the deal size, it is estimated to be worth around Rs 23,000 crore, a massive relief for Anil's debt-ridden Reliance Communications (RCom) that is saddled with loans of almost Rs 45,000 crore and was facing possible bankruptcy proceedings. The company went to Anil Ambani's fold in 2005 when the two brothers split their family businesses.

"The RJio deal consideration comprises primarily of cash payment and includes transfer of deferred spectrum instalments payable to the Department of Telecommunication (DoT)". Anil had said on Tuesday that after the completion of the revival process, the "new RCom" would have debt of just Rs 6,000 crore, down from Rs 45,000 crore in October.

The development came a month after RCom was hit by an insolvency petition from China Development Bank, its largest single creditor. Even a deal with Brookfield Infrastructure Group for selling its tower assets did not materialise.

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