Merger of companies

RCom to exit DTH after merging subsidiary with Sun Direct Reliance Digital TV, the fully-owned subsidiary of Reliance Communications that runs its direct-to-home (DTH) operations, will merge with Sun Direct to become India's second largest DTH company. Facts of Deal: - Under the deal, RCom will have 26 per cent stake in the merged entity. - The merged company would also take over about Rs 1,500 crore of debt from Reliance's DTH operations. As of June 30, RCom's total debt stood at Rs 38,400 crore. - As part of the deal, Sun Direct will later go for an initial public offering. - According to sources close to the deal, RCom has valued the 26 per cent stake at around Rs 1,500 crore. - After the deal RCom's debt would reduced by Rs 3,000 crore. - Management control would shift to the Marans, who own Sun Direct. - The deal would help RCom restructure, get out of its non-core businesses and use the proceeds to reduce debt. The company is expected to sell majority stake in Reliance Globalcomm, which controls its submarine cable assets worth Rs 6,000-7,000 crore. - RCom has signed long-term agreements with Mukesh Ambani-controlled Reliance Jio Infocomm. - According to the deal, Reliance Jio would pay RCom Rs 12,000 crore to use its tower . Business Standard This case study has been posted by student of ICAI vinanti zatakiya. you can reached her at vinanti2504@gmail.com Get Sudycafe's Updates by SMS in your mobile by Following below two Steps:  1. Download our Android Software &  2. Send a SMS, Type: JOIN CASTUDYCAFE & send to 9219592195

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