Veecon acquires Reliance Big TV

RCom has entered into a binding memorandum of understanding (MoU) with Veecon Media and Television Ltd, for sale of its subsidiary Reliance Big TV Ltd, engaged in the business of direct-to-home (DTH) services across India. RCom’s existing DTH license of Big TV will be renewed with the submission of the required bank guarantees with the Ministry of Information and Broadcasting by the buyer. This pact is in line with the company’s decision to operate as a mobile virtual network operator (MVNO) that offers 4G services once it sheds its 2G and 3G voice business.

The operator is going through strategic debt restructuring (SDR). It has presented a fresh zero write-off plan to its lenders, under which banks could convert some of its debt and take a 51 percent stake in the telecom operator. Banks could then raise funds by selling the telco’s towers and spectrum to potential buyers, including Reliance Jio, and monetize real estate assets.

The transaction will help reduce the liability of unsecured creditors, benefitting all stakeholders including lenders and shareholders of RCom. Of its over `45,000 crore debt, the joint lenders forum (JLF) could convert `7000 crore of debt into equity; raise `17,000 crore through sale of assets such as telecom towers and spectrum and another `10,000 crore via sale of real estate.

This alliance ensures that the 1.2 million customers of RBTV will have uninterrupted services. It also ensures the continuity of employment for approximately 500 employees of RBTV. The successful culmination of the transaction is subject to the requisite approvals from licensors, regulatory authorities, and lenders of RCom.

Anil Ambani Chairman, Reliance Group
“Pursuant to the transaction, the buyer will acquire the entire shareholding of RBTV with business on as-is where-is basis, along with all existing trade liabilities and contingent liabilities,”