Anil Ambani’s debt-ridden Reliance Communications (RCom) on Monday said that the company has signed a Memorandum of Understanding with Delhi-based Veecon Media and Television Limited to sell its non-core DTH business, Reuters reported. RCom said that the MoU with Veecon Media And Television is for the 100% stake sale of its subsidiary Reliance Big Tv Limited (RBTV).
According to the MoU, Veecom Media and Television Limited will take over all of Reliance Big TV’s trade and contingent liabilities and retain 500 employees. Earlier, the company had, in a public notice, announced shutting down its DTH service across India from November 18.
“Reliance Digital TV informs its customers that due to the expiry of our licence we will be shutting down our DTH services across India wef 18 November. Customers are advised to make alternative arrangements to keep watching their favourite TV channels. We regret the inconvenience caused,” Reliance Big TV had said in a regional paper advertisement.
Earlier, the company made failed attempts to merge Reliance Digital Services with Sun Direct. Several other attempts to sell the DTH service to potential buyers did not turn fruitful either. The sale of its DTH services was a part of company’s long-term plan to reduce its debt. RCom’s net debt stood at Rs 45,000 crore at the end of March 2017.
It is also being reported that RCom’s Rs 11,000 crore merger deal with Brookfield also collapsed following the failure of its merger with Aircel. RCom had scrapped its merger with Aircel on October 3 citing legal and regulatory uncertainties and interventions by various parties. The Anil Ambani-led group was trying to reduce its heavy debt by Rs 14,000 crore by merging its wireless business with Aircel.
However, some respite came last week as the Department of Telecom (DoT) approved the merger of Sistema Shyam Teleservices (SSTL) into RCom, a deal which will add around 2 million customers and annual revenue of around Rs 700 crore to the Anil Ambani-led company.
Reliance Communications reported its third quarterly loss in a row last month. It is trying to find ways to cut debt after lenders gave it a reprieve on loan repayments until the end of 2017. Earlier this year, rating agencies Fitch and Moody’s downgraded Reliance Communications’ debt rating deeper into junk grade. Moody’s cut it to Caa1 from B2, while Fitch lowered its rating on the company to CCC, implying that some kind of default on the company’s debt is a “real possibility”.