Reliance Jio to acquire RCOM wireless assets

Reliance Jio Infocomm, a subsidiary of Reliance Industries has announced signing of definitive agreement for the acquisition of specified assets of Reliance Communications (RCOM) and its affiliates.

An asset monetization process for RCOM assets was mandated by the lenders of RCOM, who appointed SBI Capital Markets to run the process. In this process, Reliance Jio emerged as the successful bidder in the two-stage bidding process.

Consequent to the agreement, Reliance Jio or its nominees will acquire assets under four categories – Towers, optic fiber cable network, 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 rollout of wireless and Fiber to Home (FTH) and enterprise services by Reliance Jio.

Reliance Jio will acquire 122.4 MHz of 4G Spectrum in the 800/900/1800/2100 MHz bands; over 43,000 towers; around 178,000 RKM of fiber with pan India footprint and 248 Media Convergence Nodes, covering around 5 million square feet used for hosting telecom infrastructure.

The acquisition is subject to receipt of requisite approvals from government 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.

Reliance Jio is being advised by Goldman Sachs, Citigroup Global Markets, JM Financial, Davis Polk & Wardell, Cyril Amarchand Mangaldas, Khaitan & Co and Ernst & Young on this transaction.

The company expects the transactions to close in a phased manner between January and March 2018, subject to lenders’ and other applicable approvals.

RCOM will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders.