Reliance to integrate RJio, digital initiatives into new subsidiary; to invest `1.08 lakh crore

The subsidiary will also acquire RIL’s equity investment of Rs 65,000 crore in RJIL. It has also proposed a scheme of arrangement between RJIL and certain classes of its creditors, including debenture holders, for transfer of identified liabilities of up to Rs 108,000 crore to RIL. There will be a rights issue of OCPS aggregating up to Rs 108,000 crore for the purpose of payment of consideration for transfer of identified liabilities.

The subsidiary will subscribe to this issue. RJIL will become virtually net debt free company by March 31, 2020, with the exception of spectrum related liabilities.

“Like global technology peers, the Digital Platform Company with negligible leverage makes a compelling investment proposition for both strategic and financial investors, many of whom have evinced strong interest in partnering with us. It will have significant financial strength to address the digital services opportunity in India,” RIL said.

Mukesh Ambani, chairman and managing director, RIL, said, “This new company will be a truly transformational and disruptive digital services platform. It will bring together India’s number 1 connectivity platform, leading digital app ecosystem and world’s best tech capabilities globally, to create a truly digital society for each Indian. Jio has been heralding the digital services revolution in India and will continue to do so in the years to come.

“Given the reach and scale of our digital ecosystem, we have received strong interest from potential strategic partners. We will induct the right partners in our platform company, creating and unlocking meaningful value for RIL shareholders,” he added.

The proposed plan will ensure monetisation opportunities accrue to shareholders efficiently, RIL said. “There is no impact in the value pre- and post-reorganisation for any shareholder. There is no impact on the consolidated debt of RIL. Consolidation of liabilities in RIL creates an efficient structure to manage debt and cash. “It does not impact RIL’s standalone credit profile given its robust cash flows and conservative leverage,” it added.

According to RIL, these platforms are also backed by investment in emerging and next generation technologies, including blockchain, artificial intelligence and machine learning, virtual, augmented/ mixed realty, computer vision, high performance and edge computing, natural language processing, and voice enabled services.