India’s richest man Mukesh Ambani has come to the rescue of his younger sibling Anil Ambani, by stepping in to bail out the latter’s debt-ridden Reliance Communications – agreeing to acquire its spectrum, towers, optical fiber network and other wireless assets.
The two companies involved – Reliance Jio Infocomm and Reliance Communications – did not disclose the size of the deal, but banking sources put the transaction value at around Rs 250 billion (US$3.9 billion), Press Trust of India reported.
Reliance Communications hopes to use the entire proceeds to pay off debt, which is around Rs 450 billion ($7 billion).
The mega-deal coincided with the 85th birthday of their father and Reliance founder Dhirubhai Ambani.
The news came just two days after Reliance Communications disclosed a new deal with lenders under which nearly Rs 400 billion ($6.2 billion) will be raised through the sale of assets, averting an imminent takeover by 35 local and foreign banks.
A month ago the beleaguered company was forced to close its mobile voice business, as it was not in a position to support operational expenses.
The transaction, subject to approval from lenders and other authorities, is expected to be completed in phases between January and March 2018.