Reliance Industries Wednesday said it will buy majority stakes in DenNetworks Ltd and Hathway Cable and Datacom Ltd for Rs 5,230 crore.
It will acquire 66% stake in Den Networks through an investment of Rs. 2,045 crore, and will acquire 51.3% stake in Hathway Cable and Datacom Limited through a primary investment of Rs. 2,940 crore. The transaction will accelerate JioGigaFiberrollout in 50 million homes across 1,100 cities.
RIL would also make open offers to minority shareholders of GTPL Hathway Ltd, a company jointly controlled by Hathway with 37.3 per cent stake, and Hathway Bhawani Cabletel and Datacomm Limited, a subsidiary of Hathway.
RIL has made its investment in DEN through a preferential issue under SEBI regulations and secondary purchase of Rs. 245 crore from the existing promoters. It has made investment in Hathway Cable and Datacom Limited through a preferential issue under SEBI regulations.
Mukesh Ambani, Chairman & Managing Director, RIL said, “We are glad to join hands with Shri Rajan Raheja and Shri Sameer Manchanda, two of the pioneers in the MSO industry. Our investments in DEN and Hathway create a win-win-win outcome for the LCOs, customers, content producers and the eco-system.
“With Local Cable Operators now as part of the Jio ecosystem, we look forward to bringing Jio’s advanced JioGigaFiber and Smart Home Solutions to more Indian homes, even quicker. We look forward to welcoming other MSOs and LCOs to be part of this partnership. This will result in growing wireline data connectivity in India and making state-of-the-art highspeed affordable internet and digital services accessible to the widest population in the shortest possible time.”
Through this transaction, Reliance and Jio will be strengthening the 27,000 LCOs that are aligned with DEN and Hathway to enable them to participate in the digital transformation of India through access to superior back-end infrastructure; tie-ups with content producers, and access to latest business platforms to improve business efficiencies and deliver customer experience. In addition, Reliance will also help this LCOs through an investment in digital infrastructure for connecting customers.
“And the LCOs will continue to do what they do best – provide localized, intimate, people-friendly and ultra-fast customer services. This will create multiple future opportunities for LCOs as Jio rolls out new services and platforms,” the company said.
RIL is being advised by JM Financial Limited, Citigroup Global Markets, Khaitan & Co, Cyril Amarchand Mangaldas, AZB Partners and EY LLP on this transaction.
Source: Economic Times