Mukesh Ambani acquiring mobile biz assets of Anil Ambani

Vastavam web: Billionaire Mukesh Ambani today stepped in to bail out younger brother Anil Ambani’s debt- ridden Reliance Communications by acquiring spectrum, tower, optical fiber network and other wireless assets.While the two companies did not disclose the deal size, banking sources pegged the transaction value at Rs 24,000- 25,000 crore.The mega deal also coincides with the 85th birth anniversary of Reliance founder Dhirubhai Ambani.

The deal will bring an immediate relief to Reliance Communications (RCom), which is reeling under Rs 45,000 crore debt, and the company hopes to use the entire proceeds to pare its debt.”Reliance Communications Limited today announced it has signed definitive binding agreements with Reliance Jio Infocomm Limited (RJio) for sale of wireless spectrum, tower, fiber and Media Convergence Node (MCN) assets,” RCom said in a statement.The transaction, subject to approval from lenders and other authorities, is expected to be completed in a phased manner between January and March 2018.

“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 will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders,” RCom said.The transaction, subject to approval from lenders and other authorities, is expected to be completed in a phased manner between January and March 2018.

“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 will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders,” RCom said.It further said process to acquire assets of RCom is supervised by an independent group of “distinguished industry experts” and that it emerged as the successful bidder in the two-stage bidding process.

“An asset monetisation process for RCom assets was mandated by the lenders of RCom, who appointed SBI Capital Markets Limited to run the process,” the Jio release said.The parties are bound by confidentiality obligations and will make further disclosures at the appropriate time, Jio said without disclosing the value of the transaction.The beleaguered RCom was forced to close its mobile voice business a month back as it was not in a position to support the operational expenses.Earlier this week, RCom announced its exit from the strategic debt restructuring (SDR) and outlined an ambitious revival plan that involved zero write-offs to lenders.