Anil Ambani-led Reliance Communications has got into a binding share purchase agreement with Pantel Technologies and Veecon Media & Television for the sale of its DTH arm Reliance BIG TV for an undisclosed amount. The move is aimed at reducing the debt burden of the company. The transaction will help reduce the liability of unsecured creditors, benefiting all stakeholders, including lenders and shareholders of RCom, the company said. RCom said the transaction is in consonance with the stated objective to focus on B2B businesses of the new RCom and the buyers will acquire the entire shareholding of Reliance BIG TV with business on an as-is, where-is basis.
The transaction ensures that all 1.2 million customers of BIG TV shall continue to enjoy uninterrupted services. It also ensures continuity of employment for approximately 500 employees of RBTV, the telco added. BIG TV's DTH licence is being renewed and the required bank guarantees have already been submitted to the Ministry of Information and Broadcasting by the buyers, it further stated. Pantel Technologies is an information technology and communication devices hardware company and sells Penta T-Pad Tablet PCs. Earlier in June 2017, Pantel Technologies had acquired Den-Snapdeal TV-Shop Shopping Channel.
The announcement came amid reports that China Development Bank has filed insolvency case against RCom before the National Company Law Tribunal. However, RCom said it has not been served any notice of the application filed by China Development Bank with NCLT. RCom is reeling under a staggering debt burden of close Rs 46,000 crore. Roughly one-fifth of this is owed to Chinese Development Bank, which organized a syndicated loan for the company in 2011. While operational creditors such as Ericsson India Private and Tech Mahindra have already moved the National Company Law Tribunal to start insolvency proceedings against RCom, this new petition by a huge creditor could come as a major challenge for Anil Ambani to hold on to at least a minority stake in the company.
RCOM is finding it hard to service its dues to increased competition from Reliance Jio which is offering voice for free and data at dirt-cheap tariffs. The company is in the midst of a strategic debt restructuring plan and lenders have the option to convert part of their loans to equity by December this year. BSE had sought clarification from Reliance Communications after market hours on Monday regarding the news that China Development Bank has filed an insolvency case against it. Reliance Communications spokesperson replied that the company has not been served any notice of the application filed by China Development Bank with NCLT.