Shareholders in Reliance Communications (RCom) have given their support to the proposed sale of its wireless assets to Reliance Jio Infocomm.
The deal, which will reduce the troubled operator’s debt by INR250 billion ($3.9 billion), will see Jio acquire all of RCom’s spectrum, towers and fibre telecoms infrastructure. On track for completion by March 2018, the deal was backed by a majority of 99.91% of shareholders.
RCom’s debt is held by a consortium of Indian and overseas banks, and is estimated to be around INR450 billion. The Jio deal forms part of RCom’s efforts to write down this debt; it was struck at the start of this year, following rumours in October 2017 that RCom would sell off the larger part of its wireless operations.
The agreement will see Reliance Industries regain control over RCom’s telecoms unit after the business was split between the Ambani brothers in 2005. RCom had previously attempted to merge with Aircel but the deal fell through, contributing further to its problems.
The deal is the latest in a spate of consolidation in the Indian market, which was shaken up following Jio’s entry to the market in September 2016. Vodafone India and Idea Cellular are merging to create a new market leader, while Bharti Airtel is strengthening its footprint with the purchase of Telenor’s Indian unit.
Following the acquisition, RCom has stated that it will continue to provide services to enterprises as a B2B operation, both within India and overseas. In addition, it will retain control of its data centres and submarine cable assets and will operate them as usual.