India’s richest man to rescue brother’s telecom firm
Mukesh Ambani's Reliance Jio Infocomm has decided to acquire the spectrum, towers, optical fiber network and wireless assets of Reliance Communications
India’s richest man Mukesh Ambani has come to the rescue of his younger sibling Anil Ambani, by stepping in to bail out the latter’s debt-ridden Reliance Communications – agreeing to acquire its spectrum, towers, optical fiber network and other wireless assets.
The two companies involved – Reliance Jio Infocomm and Reliance Communications – did not disclose the size of the deal, but banking sources put the transaction value at around Rs 250 billion (US$3.9 billion), Press Trust of India reported.
Reliance Communications hopes to use the entire proceeds to pay off debt, which is around Rs 450 billion ($7 billion).
The mega-deal coincided with the 85th birthday of their father and Reliance founder Dhirubhai Ambani.
The news came just two days after Reliance Communications disclosed a new deal with lenders under which nearly Rs 400 billion ($6.2 billion) will be raised through the sale of assets, averting an imminent takeover by 35 local and foreign banks.
A month ago the beleaguered company was forced to close its mobile voice business, as it was not in a position to support operational expenses.
The transaction, subject to approval from lenders and other authorities, is expected to be completed in phases between January and March 2018.