MBL will initially acquire a 24% equity stake of RBNL through a preferential allotment for a total consideration of Rs 202 crore.
Anil
Ambani-led Reliance Group’s Reliance Capital and Reliance Land
will divest the entire equity stake in Reliance Broadcast Network
(RBNL) to Jagaran Prakashan-owned Music Broadcast (MBL).
RBNL operates 58 radio stations across the county under the brand name BIG FM Radio, while MBL operates radio stations under Radio City (39 stations).
MBL
will initially acquire a 24 per cent equity stake of RBNL through a
preferential allotment for a total consideration of Rs 202 crore and,
thereafter, subject to the receipt of regulatory approvals, it will
acquire all of the remaining equity stakes held by Reliance Capital
and Reliance Land in RBNL at a enterprise value of Rs 1,050 crore.
MBL
will acquire 40 of BIG
FM's 58 stations, while the remaining 18 will be sold to other
buyers, talks for which are in the final stages, reveal company
sources. These 18 stations have an overlap with the MBL’s stations,
and hence are not included in the deal.
Reliance
Capital will receive an estimated Rs 150 crore from the disposal of
these stations assets of RBNL which do not form part of the
transaction with MBL, in accordance with the regulations. The deal
will cut Reliance Capital’s outstanding debt by an estimated Rs
1,200 crore. The transaction is expected to close in the first
quarter of FY21.
Amit
Bapna, CFO, Reliance Capital, said: “Together with the stake sale
in Reliance Nippon Asset Management for Rs 6,000 crore and other
ongoing monetisation plans, we expect Reliance Capital’s debt to
reduce by around Rs 12,000 crore (nearly 70%) in FY20.”
EY
India is acting as the exclusive investment banker to the
transaction, and Phoenix Legal is acting as legal advisors to
Reliance Capital group.
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