HEADLINES:
November 16 2018
Jio may buy most RCom assets
22 December 2017

Mukesh Ambani firm front runner to get debt-laden telco’s spectrum, say sources

Mukesh Ambani-led Reliance Jio has emerged as the front runner to buy the assets of Anil Ambani-led Reliance Communications Ltd. (RCom) in the wake of a meeting of lenders’ to debt-laden RCom, according to sources.

Reliance Jio is keen to acquire RCom’s spectrum assets in the 850 Mhz and 2100 Mhz band, while Bharti Airtel and Vodafone are interested in buying spectrum in the 900 Mhz band, said sources in the know of developments, who did not wish to be identified.

The joint lenders forum (JLF), which met in Mumbai on Thursday, discussed the sale of assets of the telecommunications firm and a proposal to convert RCom’s debt into equity.

Reliance Jio is also said to be eyeing the telecom towers and optic fibre network of the cash-strapped phone services provider — assets that Canadian pension fund Brookfield, and a clutch of private equity firms have also shown interest in, said one of the sources.

RCom has 850 Mhz spectrum in all 22 circles, 2100 Mhz spectrum in 13 circles and 900 Mhz in 2 circles. The JLF, which has received bids for assets including spectrum, is still evaluating them and plans to convert a majority of debt into equity, according to the sources.

‘Makes sense’

“It makes sense for Reliance Jio to buy the RCom assets given it already uses RCom spectrum, fibre and tower network,” said Paras Bothra, head of equity research at Ashika Stock Broking.

RCom’s spectrum is valued at ₹19,000 crore, while tower and fibre assets are valued at about ₹10,000 crore.

A decision on the conversion of debt into equity would be taken by next week, said another source. RCom’s debt is about ₹45,000 crore.

RCom shares surged as much as 65% in the last three sessions and stock exchanges had sought a clarification from the firm on the stock price jump.

“Company cannot comment on changes in volume and price in the stock markets,” RCom said in a filing.

Reliance Jio didn’t immediately respond to an e-mail seeking comment.

RCom rose 4% to ₹17.97 on the BSE on Thursday.

 

 

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