Reliance Tunes Out Of BIG FM

Reliance Capital and Reliance Land sold their entire equity stake in Reliance Broadcast Network to Music Broadcast Limited (MBL) for Rs. 10.5 billion (US$150 million).

Reliance Broadcast operates under the brand name BIG FM Radio network with 58 stations across the country. MBL is part of the Jagran Group and operates radio stations under the Radio City brand name. The acquisition will expand its network to 79 radio stations making it the largest radio network in India.

“Our client MBL will acquire 24% of the equity share capital of Reliance Broadcast by way of a preferential allotment for a total consideration of ₹2 billion,” Khaitan & Co partner Rajat Mukherjee told India Business Law Journal.

“Thereafter, subject to the receipt of the approval from the Ministry of Information and Broadcasting, MBL will acquire the entire equity stake held by the promoters (i.e. Reliance Capital and Reliance Entertainment Networks) in Reliance Broadcast.”

Mukherjee said it was the largest deal in India’s FM radio space by value and size. “[It was ] a very professional approach to getting the deal done by both principals and all advisors,” he said, commenting on his experience of working on the deal.

The equity stake sale combined with the sale of Reliance Broadcast’s other assets will allow Reliance Capital to reduce its outstanding debt by Rs. 12 billion.

“Together with the recently announced stake sale in Reliance Nippon Asset Management for ₹60 billion and other ongoing monetization plans, we expect Reliance Capital’s debt to reduce by around ₹120 billion in the current financial year,” said Reliance Capital CFO Amit Bapna.

Mukherjee was supported by principal associate Sarthak Sarin and associate Abhiroop De. Phoenix Legal acted as legal adviser to Reliance Capital group. ―India Business Law Journal