Reliance Industries Ltd on Friday said its board has approved the formation of a wholly-owned subsidiary for digital platform initiatives and investment of Rs 1.08 trillion in the unit.
The subsidiary will also acquire RIL's equity investment of Rs 65,000 crore in Reliance Jio Infocomm Ltd (RJIL), it said in a regulatory filing.
RIL said that RJIL board has approved a scheme of arrangement between the company and certain classes of its creditors including debenture holders for transfer of identified liabilities of up to Rs 1.08 trillion to RIL.
"Rights Issue of Optionally Convertible Preference Shares (‘OCPS') aggregating up to Rs 1,08,000 crore for the purpose of payment of consideration for transfer of identified liabilities - WOS (wholly owned subsidiary) to subscribe to this issue," it added.
As a result, RJIL will become virtually net debt-free company by March 31, 2020, with exception of spectrum-related liabilities, it noted.
"This new company will be a truly transformational and disruptive digital services platform. It will bring together India's No 1 connectivity platform, leading digital app ecosystem and world's best tech capabilities globally, to create a truly Digital Society for each Indian," RIL Chairman and Managing Director Mukesh Ambani said.
He added that given the reach and scale of its digital ecosystem, the company has 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.