Anil Ambani-led Reliance Communications Ltd (RCom) on Monday said it has inked a memorandum of understanding with Veecon Media and Television Ltd to sell its direct-to-home (DTH) business Reliance BIG TV Ltd.
As part of the deal, Veecon Media and Television will acquire the entire shareholding of Reliance BIG TV on an 'as-is where-is' basis, along with all existing trade liabilities and contingent liabilities, it said.
The transaction will help RCom pare debt, it said in a stock-market disclosure without disclosing financial details. The sale of its DTH business is in consonance with the company's objective to focus on its business-to-business offerings, it added.
Following the transaction, around 500 employees of Reliance BIG TV will retain their jobs.
The deal, however, is subject to approvals from licensors, regulatory authorities and lenders of RCom.
The sale of RCom's DTH business comes barely two days after a deal to sell its telecom tower business to Canada's Brookfield Infrastructure Partners fell through. The deal with Brookefield hinged on RCom’s merger with Aircel, which was called off last month due to regulatory and legal issues.
The combination of RCom’s wireless business with Aircel, and the monetisation of the tower business were together expected to reduce RCom's overall debt by Rs 31,000 crore ($4.6 billion), or nearly 70%.
RCom's unsuccessful attempts at sealing these two major deals have spooked investors and taken a toll on its stock. Its shares fell 6.21% on Monday to end at Rs 15.85 apiece in a flat Mumbai market.