Anil Ambani is on a mission to save his debt-laden company, sells another unit of the company. Reliance Capital Group has divested its entire stake in the radio network Big FM. After the disposal of his stake in Reliance Nippon Life Asset Management Company (RNAM), the firm will soon sell off his stake in Big FM.
Reliance Broadcast Network Limited (RBNL) also known as 92.7 Big FM is a radio channel under the Reliance Capital Group. The stakes for the same are sold to the well-known radio channel Radio City. The radio channel is a part of the music company Music Broadcast Limited. It is a subsidiary of Jagran Prakashan Limited.
Acquisition details
Big FM network has 58 stations all across India. The 40 stations have been confirmed to be taken by Radio City. It is also known as Music Broadcast Limited. The remaining 18 stations will be sold in the second phase of the divestiture. Radio City did not buy these 18 stations because the channel is already present in those cities. The second phase of sale will be carried out due to the overlapping of the stations (Big FM and Radio City). Furthermore, these 18 stations are expected to be sold for Rs. 150 crores by the Anil-led Reliance Group.
Initially Music Broadcast Limited will be acquiring 24% of the equity stake of RBNL. This will be done by the way of preferential allotment of the shares. In addition to this, the monetary value of this will be Rs. 202 crores. Further, the remaining stake will be acquired at the company’s enterprise value of Rs. 1050 crores. This is subject to getting the approvals of the regulatory body.
Moreover, the total selling of the stake is expected to gain Rs. 1250 crores for Reliance Capital Limited. Further, this is done as a part of the asset monetization scheme of Reliance Anil Dhirubhai Ambani Group (Reliance ADAG). It is in order to lessen the Group Company’s debt. This sale is expected to decrease the debt of Reliance Capital Limited by Rs. 1200 crores.
Reliance ADAG future plans
Recently, the Reliance ADAG had carried out the stake sale in RNAM for Rs. 6000 crores. This was with their partner Nippon Life Insurance Company. Reliance Capital divested their entire 42.88% stake from the company. The stake sale of RBNL and future asset monetization plans of the company, they are expecting to reduce their debt by 70%. The company is estimating to decrease Reliance Capital’s debt by Rs. 12000 crores in FY20.
