Mukesh Ambani acquires RCom’s wireless assets to bail out brother Anil

Mukesh Ambani on Friday stepped in to bail out younger brother Anil Ambani by acquiring spectrum, tower, optical fibre network and other wireless assets of the debt-laden Reliance Communications.

Reliance Jio Infocomm Ltd (RJIL) emerged the successful bidder in an asset monetisation process for RCom assets mandated by the lenders, which appointed SBI Capital Markets Limited to run a two-stage bidding process.

Reliance Jio Infocomm Limited (RJIL), a subsidiary of Reliance Industries Limited (RIL) also on Thursday announced the signing of agreement for the acquisition of specified assets of Reliance Communications Limited (RCom) and its affiliates.

The asset monetisation process for RCom assets was mandated by the lenders of RCom, which appointed SBI Capital Markets Limited to run the process. The process is supervised by an independent group of distinguished industry experts.

''Consequent to the agreement, RJIL or its nominees will acquire assets under four categories – towers, optic fiber cable network (OFC), spectrum and media convergence nodes (MCN) from RCom and its affiliates. 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,'' the Mukesh Ambani firm stated in a release.

Reliance Communication, which has a total debt burden of Rs45,000 crore, is expected to have made about Rs25,000 crore from the transaction, according to banking sources.

The deal comes days after Anil Ambani announced a new deal with lenders under which Reliance Communications proposed to raise nearly Rs40,000 crore through sale of assets.

The deal, which coincides the 85th birth anniversary of Reliance founder Dhirubhai Ambani, also helps avert an imminent takeover of Reliance Communications by 35 banks, including foreign lenders.

Reliance Communications Limited on Thursday announced the signing of definitive binding agreements with Reliance Jio Infocomm Limited (RJIL) for sale of wireless spectrum, tower, fiber and media convergence node (MCN) assets.

RCom said the deal packs in 122.4 MHz of 4G Spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers, 1,78,000 kilometres of fiber and 248 media convergence nodes.

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 parties are bound by confidentiality obligations and will make further disclosures at the appropriate time.

RJIL is being advised by Goldman Sachs, Citigroup Global Markets, JM Financial Private Limited, Davis Polk & Wardwell LLP, Cyril Amarchand Mangaldas, Khaitan & Co and Ernst & Young on this 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.

The revival plan had the backing of the Chinese lender which had dragged it to the National Company Law Tribunal for defaulting on $1.8 billion loan, and sale of residual spectrum, towers and realty assets, besides a possible minority stake sale to a strategic investor.