Reliance to create $15 billion digital unit to pare telecom debt

NEW DELHI (Reuters) - India's Reliance Industries Ltd on Friday said it would invest nearly $15 billion to create a digital services company as it seeks to cut debt at its telecom venture, potentially making way for the entry of a strategic investor. Controlled by billionaire Mukesh Ambani, Reliance's debt burden has risen significantly since its telecoms unit Jio Infocomm entered India's crowded mobile market in late 2016 offering free voice calls and cut-price data to build a massive consumer base

Reuters October 26, 2019 00:08:58 IST
Reliance to create $15 billion digital unit to pare telecom debt

Reliance to create 15 billion digital unit to pare telecom debt

NEW DELHI (Reuters) - India's Reliance Industries Ltd on Friday said it would invest nearly $15 billion to create a digital services company as it seeks to cut debt at its telecom venture, potentially making way for the entry of a strategic investor.

Controlled by billionaire Mukesh Ambani, Reliance's debt burden has risen significantly since its telecoms unit Jio Infocomm entered India's crowded mobile market in late 2016 offering free voice calls and cut-price data to build a massive consumer base.

The price war unleashed by Jio forced rivals to consolidate, driving companies such as Reliance Communications, controlled by Ambani's younger brother, and Aircel out of business.

Reliance Industries will have rights to convert its 1.08 trillion rupee ($15.26 billion) investment in the new digital company into equity, the oil-to-retail conglomerate said in a statement.

The new unit will, in turn, invest the funds in Jio, making the telecoms venture almost net debt free by the end of March 2020.

The new digital services company - which also includes Jio's news, movie and music apps - will also acquire Reliance's equity investment of 650 billion rupees in Jio.

"Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners," Reliance Chairman Ambani said in the statement.

"We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders."

(Reporting by Sankalp Phartiyal and Nidhi Verma; Editing by Kirsten Donovan)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.