ADAG restructures infra, telecom biz to unlock value

With an aim to unlock shareholder value through possible investment by strategic and financial partners and bring in more transparency, Anil Dhirubhai Ambani group (ADAG) is planning a major restructuring exercise for some of its business divisions at its infrastructure and telecom arms.

The reorganisation and restructuring schemes, approved by the directors of Reliance Infrastructure and Reliance Communications at separate meetings this weekend, are aimed at unlocking value, simplifying the business structure and bring in greater transparency.

After a meeting of its committee of directors, which approved transfer of about half-a-dozen of its business units, Reliance Infra said the reorganisation would unlock value in view of possible investments by strategic and financial players in various businesses, in addition to other benefits.

At the same time, RCom's board of directors also approved transfer its optic fiber division to its subsidiary Reliance Infratel to create a single telecom infrastructure entity and cut down its operating costs.

Besides, it was aimed at identifying actual economic value arising from infrastructure business and telecom services businesses, the company said.

This comes within days of the group's financial services arm Reliance Capital announcing plans set up separate subsidiaries for consumer finance and home loan businesses, where it said, strategic investors could be brought in in about a year's time or once the market conditions improve.

There would be no change in the overall capital structure of the company and no shares or securities would be issued or cancelled as part of the restructuring exercises at both Reliance Infra and RCom.