Reliance Jio to acquire RCom's wireless infra assets

Reliance Jio to acquire RCom's wireless infra assets”

Anil Ambani's debt-laden Reliance Communications Ltd has signed an agreement to sell its wireless assets to Reliance Jio Infocomm Ltd, the telecoms arm of elder brother and billionaire Mukesh Ambani's oil conglomerate Reliance Industries Ltd, both the companies said in separate statements on Thursday.

Reliance Communication on Tuesday had announced a new asset monetisation plan and its exit from SDR framework.

While the companies didn't disclose the acquisition value, Anil Ambani had said earlier the assets were worth Rs 25,000 crore.

"All this will happen, the company said, without any or "zero" write-offs to lenders and bondholders, as well as without any conversion of debt to equity", the company had said then.

Consequent to the agreement, RJio or its nominees will acquire towers, optical fibre cable network, spectrum and Media Convergence Nodes (MCN) from RCom. Besides these telecom infrastructure, the company is also selling off its real estate properties in New Delhi, Chennai, Kolkata, Jigni and Tirupati. The Reliance Jio deal consideration comprises primarily of cash payment and includes transfer of deferred spectrum instalments payable to the Department of Telecommunication.

RCom said it will use the proceeds of this cash deal exclusively to repay debt to its lenders. RJIL emerged as the successful bidder in the two-stage bidding process.

The revival plan, which also has the backing of the Chinese lender which had dragged it to the National Company Law Tribunal for defaulting on $1.8 billion loan, involves sale of RCom's residual spectrum, towers and realty assets, including the 125-acre DAKC, which is the operational headquarters of the group, and also a possible minority stake sale to a strategic investor, Ambani told reporters in Mumbai.

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. "The consideration is payable at completion and is subject to adjustments as specified in the agreement", the Jio statement said.

Khaitan & Co and United States firm Davis Polk & Wardwell are understood to have also advised Jio.

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