RCom to sell wireless business to Reliance Jio; stock hits 52-week high

The stock hit a 52-week high of Rs 41.77 on the BSE in early morning trade, appreciating 156% in past four trading days from Rs 16.31 on December 22, 2017.

Shares of Anil Ambani-owned Reliance Communications (RCom) zoomed 35% to Rs 41.77, also its 52-week high on the BSE in early morning trade after Mukesh Ambani-led Reliance Jio said it will acquire RCom's mobile business assets including spectrum, mobile towers and optical fibre network of the company. On the National Stock Exchange (NSE), the stock rallied 30% to Rs 40.15 in intra-day trade.

"Reliance Jio Infocomm, a subsidiary of Reliance Industries Limited, today announced signing of definitive agreement for the acquisition of specified assets of Reliance Communications Limited and its affiliates," Reliance Jio said in a statement.

“The company expects the transactions to close in a phased manner between January and March 2018, subject to lenders’ and other applicable approvals,” RCom said in a statement.

The RJIO deal consideration comprises primarily of cash payment and includes transfer of deferred spectrum installments payable to the Department of Telecommunication (DoT). The Company will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders, it added.

The market price of RCom has been more than doubled in past four trading sessions after the company announced debt cut plan. RCom said on Tuesday it has exited the strategic debt restructuring (SDR) scheme of lenders by agreeing to sell its telecom towers, real estate and other assets, and getting a strategic investor in the “new RCom", which would help reduce its debt by Rs 39,000 crore. The appreciated by 156% from Rs 16.31 on December 22, 2017.

At 09:20 AM; RCom was trading 24% higher at Rs 38.40 on the BSE, as compared to 0.29% rise in the S&P BSE Sensex. A combined 105 million shares changed hands on the counter on the NSE and BSE.

Reliance Industries was up 0.3% at Rs 928, after hitting high of Rs 932 on the BSE in intra-day trade so far.