Advertisment

RelComm to sell 5 p.c. stake in RTIL

author-image
CIOL Bureau
Updated On
New Update

MUMBAI: Reliance Communications Limited today announced that a group of leading international investors across the US, Europe and Asia, have agreed to purchase 5 per cent of the equity share capital of its 100 per cent owned tower company, Reliance Telecom Infrastructure Limited (RTIL), at an equity value of $ 6.75 billion (Rs 27,000 crore).

Advertisment

The transaction has resulted in substantial unlocking of value for Reliance Communication’s over two million shareholders.

RTIL’s equity valuation of Rs 27,000 crore ($6.75 billion) translates to approximately Rs 135 per Reliance Communication equity share, which is nearly 25 per cent of Reliance Communication’s current market price of Rs 565 per share, Reliance Communication said in a release.

The offering was heavily oversubscribed with a total order book in excess of $2 billion. The transaction will result in a cash inflow of Rs 1,400 crores, the benefits of which will flow to Reliance Communication and its shareholders.

Advertisment

The capital gains arising out of the sale of the 5 per cent stake in RTIL will be about Rs 1,200 crore ($280 million). Reliance Communication’s residual 95 per cent stake in RTIL is valued at $6.40 billion (Rs 26,000 crore), and the company will pursue opportunities for further unlocking of value through an RTIL IPO and or strategic sale at an appropriate time.

Anil Dhirubhai Ambani, chairman, Reliance Communication, said, “We are excited about the tremendous growth potential in the Indian telecom infrastructure business. Our strategy to create a separate company for infrastructure business has resulted in tremendous unlocking of value for Reliance Communication shareholders. RTIL, as an independent telecom infrastructure provider, has significant growth potential and is on track to become the leading player in India. RTIL will be listed in the near future and provide investors another attractive opportunity to participate in India’s incredible telecom growth.”

JPMorgan acted as the exclusive financial advisor on this transaction.

tech-news