Debt-laden RCom to sell DTH business to Veecon Media
06 Nov 2017
Anil Ambani Group telecom service provider Reliance Communications (RCom) has agreed to sell its subsidiary Reliance BIG TV Limited (RBTV) to Veecon Media and Television Limited, a Delhi-based company, as part of divestment of the debt-laden RCom.
''Pursuant to the transaction, the buyer will acquire the entire shareholding of RBTV with business on ''as-is where-is'' basis, along with all existing trade liabilities and contingent liabilities'', RCom stated in a regulatory filing.
Reliance Big TV, a direct to home (DTH) service provider with a pan-India licence, said Veecon will renew the existing DTH licence of BIG TV by submitting the required bank guarantees with the ministry of information and broadcasting.
This pact is in line with Rcom's decision operate as a mobile virtual network operator (MVNO) that offers 4G services once it sheds its 2G and 3G voice business. ''The transaction is in consonance with the RCOM's stated objective to focus on B2B businesses of New RCOM,'' the company stated.
''The transaction will help reduce the liability of unsecured creditors, benefitting all stakeholders, including lenders and shareholders of RCOM,'' the statement added.
Room said the transaction would ensure uninterrupted service for the 1.2 million customers of RBTV while assuring continuity of employment for approximately 500 employees of RBTV.
RCom had, meanwhile, published an advertisement in a regional newspaper that it will soon be closing operations of Reliance Digital TV because of the expiry of its licence.
''Reliance Digital TV informs its customers that due to the expiry of our licence we will be shutting down our DTH services across India wef 18 November. Customers are advised to make alternative arrangements to keep watching their favourite TV channels. We regret the inconvenience caused,'' Reliance Big TV had stated in the advertisement.
The successful culmination of the transaction is subject to the requisite approvals from licensors, regulatory authorities and lenders of RCom, it added.
Shares of Rcom closed at Rs15.85 a piece, down by 6.21 per cent on the BSE on Monday.
RCom is reported to be going through strategic debt restructuring (SDR that will involve ''zero write-off'' to its lenders, under which banks could convert part of its debt and take a 51 per cent stake in the telecom operator.
Banks could then raise funds by selling the telco's towers and spectrum to potential buyers, including Reliance Jio, and monetise real estate assets.
RCom, which owes over Rs45,000 crore to a group of lenders, has proposed that the joint lenders forum (JLF) convert Rs7,000 crore of debt into equity; raise Rs17,000 crore through sale of assets such as telecom towers and spectrum and another Rs10,000 crore via sale of real estate.
