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:
- 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.
- 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.
This case study has been posted by student of ICAI vinanti zatakiya. you can reached her at vinanti2504@gmail.com
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