RBNL operates 58 radio stations across the county under the brand name BIG FM Radio, while MBL operates radio stations under Radio City (39 stations). MBL will initially acquire a 24 per cent equity stake of RBNL through a preferential allotment for a total consideration of Rs 202 crore and, thereafter, subject to the receipt of regulatory approvals, it will acquire all of the remaining equity stakes held by Reliance Capital and Reliance Land in RBNL at a enterprise value of Rs 1,050 crore.
MBL will acquire 40 of BIG FM's 58 stations, while the remaining 18 will be sold to other buyers, talks for which are in the final stages, reveal company sources. These 18 stations have an overlap with the MBL’s stations, and hence are not included in the deal. Reliance Capital will receive an estimated Rs 150 crore from the disposal of these stations assets of RBNL which do not form part of the transaction with MBL, in accordance with the regulations. The deal will cut Reliance Capital’s outstanding debt by an estimated Rs 1,200 crore. The transaction is expected to close in the first quarter of FY21.
Amit Bapna, CFO, Reliance Capital, said: “Together with the stake sale in Reliance Nippon Asset Management for Rs 6,000 crore and other ongoing monetisation plans, we expect Reliance Capital’s debt to reduce by around Rs 12,000 crore (nearly 70%) in FY20.”
EY India is acting as the exclusive investment banker to the transaction, and Phoenix Legal is acting as legal advisors to Reliance Capital group.