Decks cleared for Jio to acquire most of RCom’s wireless assets
Reliance Jio Infocomm Ltd will buy a majority of the wireless assets of Reliance Communications Ltd (RCom) in a deal that will give the Mukesh Ambani-controlled telecom operator access to valuable 4G spectrum and help his younger brother Anil repay lenders.
Both the companies, in separate statements, said that Jio has emerged as the highest bidder and signed binding agreements with Anil Ambani-run Reliance Communications for sale of wireless spectrum, tower, fiber and Media Convergence Node (MCN) assets.
Mint on Saturday reported Jio had emerged as the highest bidder for RCom’s assets with interests in acquiring Reliance Communications’s (RCom’s) optical fibre assets, spectrum and telecom tower infrastructure.
“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 RJIL (Reliance Jio),” Jio said in the statement.
The acquisition is subject to receipt of requisite approvals from governmental and regulatory authorities, consents from all lenders, release of all encumbrances on the said assets and other conditions precedent, it added.
“The consideration is payable
NEWDELHI:
at completion and is subject to adjustments as specified in the agreement,” it said.
The deal seems to be a win-win for both brothers as Reliance Jio gets most of Reliance Communication’s assets, giving it more fire power in its telecom business, whiletheAnilAmbani-promoted firm will reduce its debt overhang substantially.
Anil Ambani on December 27 said his company has agreed to a new debt resolution plan that will see RCom sell its assets—spectrum, telecom towers, real estate—and does not entail lenders and bond holders to write off dues or convert it into equity. Through this process, Ambani hoped to cut debt RCom’s debt by ₹39,000 crore from the ₹45,000 crore it owed lenders at the end of October.
According to the deal announced on Thursday, RCom’s assets include 122.4 MHz of 4G spectrum in 800/900/1800/2100 MHz bands, over 43,000 towers, 1,78,000 RKM of fiber with a panIndia footprint, 248 Media Convergence Nodes, covering 5 million sq. ft used for hosting telecom infrastructure.
The deal with Reliance Jio does not include Reliance Communications’ real estate assets.
RCom is also left with around 134 Mhz of spectrum assets for which it is understood have found other bidders.
“The RJio deal consideration comprises primarily of cash payment and includes transfer of deferred spectrum instalments payable to the Department of Telecommunication (DoT). The company (RCom) will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders,” RCom said in the statement.