Reliance Communications Limited ("RCom") today announced that a group of leading international investors across the US, Europe and Asia, have agreed to purchase 5% of the equity share capital of its 100% owned tower company, Reliance Telecom Infrastructure Limited ("RTIL"), at an equity value of US$ 6.75 billion (Rs. 27,000 crore).
The transaction has resulted in substantial unlocking of value for RCom's over 2 million shareholders.
RTIL's equity valuation of Rs. 27,000 crore (US$ 6.75 billion) translates to approximately Rs. 135/- per RCom equity share, which is nearly 25% of RCom's current market price of Rs. 565 per share.
The offering was heavily oversubscribed with a total order book in excess of US $ 2 billion.
The transaction will result in a cash inflow of Rs. 1,400 crores (US$ 337.5 million), the benefits of which will flow to RCom and its shareholders.
The capital gains arising out of the sale of the 5% stake in RTIL will be about Rs. 1,200 crore (US$ 280 million).
RCOM's residual 95% stake in RTIL is valued at US$ 6.40 (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.
Shri Anil Dhirubhai Ambani, Chairman, RCom, 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 RCom 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.
