Reliance Communications (RCom) shareholders approved a plan to sell its wireless assets to Reliance Jio Infocomm, in a move which will cut the struggling operator’s debt load by INR250 billion ($3.9 billion).
In a statement, RCom said shareholders approved the plan to sell the operator’s spectrum, towers and fibre telecoms infrastructure by a majority of 99.91 per cent. The process is expected to complete by March 2018, subject to other approvals.
RCom struck the deal to sell its assets at the start of the year, as the company looks to pay down an estimated debt load of INR450 billion held by a group of local and international banks.
News RCom was planning to shutter major parts of its wireless business first emerged in October 2017, with increased competition and a failed merger with smaller rival Aircel cited as the major factors.
The asset sale will see RCom’s telecoms operations brought back into the fold of Reliance Industries after the business was split in 2005.
RCom added it will continue to operate as a B2B focused operation following the sale, offering services to Indian and global enterprises, as well as operate its data centres and continuing to manage submarine cable assets.
The tie-up with Jio is the latest consolidation deal in the Indian market, after Vodafone India agreed to a tie-up with Idea Cellular and Airtel’s acquisition of Telenor’s local operations.
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