NEW DELHI: Reliance Communications (Rcom) has inked a pact with Veecon Media and Television Limited, for sale of its subsidiary Reliance BIG TV Limited (RBTV), which is in direct to home (DTH) services across India.
“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”, said the Anil Ambani owned telco in a regulatory filing
Rcom said that the existing DTH license of BIG TV shall be renewed with the submission of the required bank guarantees with the Ministry of Information and Broadcasting by the buyer. Shares of Rcom closed at Rs 15.85 a piece , down by 6.21% on the BSE on Monday.
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’ stated the Ambani owned company.
The operator is going through strategic debt restructuring (SDR). It has presented a fresh “zero write-off” plan to its lenders, under which banks could convert some of its debt and take a 51% 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 monetize real estate assets.
“The transaction will help reduce the liability of unsecured creditors, benefitting all stakeholders including lenders and shareholders of RCOM,” said the telco’s statement. ‘
Of its over Rs 45000 crore debt, the joint lenders forum (JLF) could convert Rs 7000 crore of debt into equity; raise Rs 17,000 crore through sale of assets such as telecom towers and spectrum and another Rs 10,000 crore via sale of real estate.
Rcom said that this alliance ensures that the 1.2 million customers of RBTV shall have uninterrupted services.” It also ensures the continuity of employment for approximately 500 employees of RBTV”.
The successful culmination of the transaction is subject to the requisite approvals from licensors, regulatory authorities and lenders of RCOM.