Mukesh Ambani-led Reliance Jio Infocomm (RJio) has emerged as a white knight to acquire the wireless assets of debt-laden Reliance Communications (RCom), controlled by his younger sibling, Anil.
Reliance Communications (RCom) is reeling under high debt of about Rs 44,000 crore(million).
RJio was the front-runner to acquire RCom’s assets. The announcement was made on Thursday, coinciding with the 85th birth anniversary of Reliance Industries Ltd founder Dhirubhai Ambani.
This is one of a series of deals between the brothers – Mukesh and Anil who had parted ways in 2005, carving the Reliance empire into two.
Both the companies have signed a binding definitive agreement and the transaction is expected to close in a phased manner in January-March 2018, RCom said in a statement.
RJio has emerged as the highest bidder in the two stage bidding process conducted under the supervision of a high-powered bid evaluation committee, comprising experts from banking, telecom and law.
The monetisation of RCom’s assets was mandated by its lenders, who appointed SBI Capital Markets to run the process. It was supervised by an independent group of distinguished industry experts.
The transaction is subject to lenders and other approvals. The deal consideration involves cash payment and transfer of deferred spectrum installments payable to Department of telecommunications. The proceeds will be used 100 per cent towards for debt reduction, RCom said.
RCom said in a separate release that the transaction is expected to close in a phased manner between January and March 2018. The deal comprises cash payment and transfer of deferred spectrum instalments payable to the DoT and the proceeds would be used to reduce its debt.
