Reliance Industries to sell $750 million stake in Jio Platforms to Silver Lake, on track to cut debt

India’s Reliance Industries Ltd said on Monday private equity firm Silver Lake will invest nearly $750 million in its digital arm, days after securing a $5.7 billion investment from Facebook Inc, boosting its efforts to cut debt

Reuters May 04, 2020 11:57:34 IST
Reliance Industries to sell $750 million stake in Jio Platforms to Silver Lake, on track to cut debt

New Delhi/Bengaluru: India’s Reliance Industries Ltd said on Monday private equity firm Silver Lake will invest nearly $750 million in its digital arm, days after securing a $5.7 billion investment from Facebook Inc, boosting its efforts to cut debt.

The deal adds to a flurry of fund-raising activity announced by the oil-to-telecoms conglomerate in recent weeks including a $7 billion share sale, with plans to eliminate $21.4 billion of net debt by the end of the year.

Reliance last week reported a 39 percent slump in March quarter profit, hit by a sharp fall in oil prices and lower fuel demand, and said at the time it had received investor interest for a Facebook-like deal. It did not give further details.

Reliance Industries to sell 750 million stake in Jio Platforms to Silver Lake on track to cut debt

Representational image. Reuters.

The 56.56 billion rupees ($746.7 million) deal with Silver Lake values Jio Platforms - the digital services entity that houses Reliance’s telecoms arm Jio Infocomm, its music and video streaming apps, at about $65 billion, Reliance said in a regulatory filing.

Click here to follow LIVE news and updates on stock markets

Silver Lake’s investment, at a 12.5 percent premium to the equity valuation of the Facebook deal, gives it slightly more than a 1 percent stake in Jio Platforms.

“Silver Lake has an outstanding record of being a valuable partner for leading technology companies globally,” Reliance Chairman and tycoon billionaire Mukesh Ambani said in a statement. “We are excited to leverage insights from their global technology relationships for the Indian digital society’s transformation.”

Silver Lake has about $40 billion in assets under management, and its portfolio of companies includes social media firm Twitter Inc, computer hardware maker Dell Technologies Inc), and movie theatre chain AMC Entertainment Holdings Inc).

Unlike traditional mobile carriers, which depended on voice services to make money, Ambani has always pitched Jio, which launched in late 2016, as a trailblazer tech company that has helped hundreds of millions of Indians use the Internet for the first time.

Facebook said late last month it would buy a 9.99 percent stake in Jio Platforms, as it looks to capitalise on WhatsApp’s 400-million strong user base in India and roll out services for grocers and small businesses.

The partnership will help Reliance use Facebook’s tech in its new businesses, while giving the US tech giant’s India reach a massive fillip with a formidable partner in Ambani, who is widely perceived to be influential in government circles.

Silver Lake’s investment highlights Reliance’s ability to monetise its digital services business and further adds to the company’s already strong financial flexibility, Moody’s Investors Service said in a note.

Shares in the Mumbai-headquartered Reliance were trading down 1.3 in a broader Mumbai market. NSEI that was down 4.9 percent at of 0455 GMT.

(Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Facebook took down 26.9 million pieces of hate speech content in the December 2020 quarter
News & Analysis

Facebook took down 26.9 million pieces of hate speech content in the December 2020 quarter

Facebook says hate speech content on its platforms declined to 7-8 views for every 10,000 content views globally.

Facebook to lift ban on Australians viewing and sharing news on its platform
News & Analysis

Facebook to lift ban on Australians viewing and sharing news on its platform

Facebook struck a deal with the government on proposed legislation that would make digital giants pay for journalism.

Facebook blocks Australians from viewing, sharing news on the platform
News & Analysis

Facebook blocks Australians from viewing, sharing news on the platform

Australian publishers can continue to publish news content on Facebook, but links and posts can’t be viewed or shared by Australian audiences.