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. While the companies did not divulge the financial details, banking sources pegged the deal at about ₹23,000 crore.
BusinessLine was the first to report, on December 20, that 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.
RJio, a wholly-owned subsidiary of RIL, emerged as the successful bidder in a two-stage bidding process. The company will acquire RCom’s more than 43,000 towers, 1.78-lakh route km of optical fibre cable network, 122.4 MHz of spectrum in the 800, 900, 1800 and 2100 MHz bands and 248 Media Convergence Nodes. These assets are expected to contribute significantly to the large-scale roll-out of RJio’s wireless, fibre-to-home and enterprise services, the Mukesh Ambani company said in a statement.
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 acquisition is subject to requisite approvals. On this transaction, RJio was advised by Goldman Sachs, Citigroup Global Markets, JM Financial, Davis Polk & Wardwell, Cyril Amarchand Mangaldas, Khaitan & Co and EY.
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.