MUMBAI - Anil Ambani's debt-laden Reliance Communications Ltd has signed an agreement to sell its wireless assets to Reliance Jio Infocomm Ltd, the telecoms arm of elder brother and billionaire Mukesh Ambani's oil conglomerate Reliance Industries Ltd, both the companies said in separate statements on Thursday.
The sale comprises of all spectrum, tower, fibre optic and other telecom infrastructure assets of Reliance Communications and is subject to government and other regulatory approvals, the statements said.
The sale marks the return of the telecom company back to the fold of Reliance Industries, which forayed into telecoms in 2002, spearheaded by elder Ambani, under the name of Reliance Infocomm Ltd.
A feud between the two brothers in 2005 led to the split of Reliance Industries when Mukesh Ambani kept the cash cow oil and gas business and Anil Ambani walked away with telecoms and power.
However, with the launch of Reliance Jio, Mukesh Ambani's reentry into the telecom space in September 2016 coupled with cut-price data and free voice service rattled the telecom industry, pushing RCom, as it is commonly called, into a debt spiral.
On Tuesday, Anil Ambani announced the company had received non-binding offers from 15 firms for the sale of its wireless assets. The sale would slash its debt pile by 390 billion rupees ($6.09 billion) without any haircut by the banks.
"These assets are strategic in nature and are expected to contribute significantly to the large scale roll-out of wireless and Fiber to Home and Enterprise services by RJIL (Reliance Jio)," Reliance Jio said in its statement.
Reliance Jio is India's fastest growing telecoms company with a subscriber base of close to 140 million. Through the deal, Reliance gets access to four bands of spectrum and 43,000 telecom towers and a countrywide fibre optic network.