NEW DELHI: The mega telecom deal involving the acquisition of wireless assets of debt-laden Reliance Communications by Reliance Jio is a "good and welcome development" that fully protects lenders' interest, a top SBI official said today.
At the same time, the deal also sets a great example for promoters of other stressed companies, State Bank of India (SBI) Chairman Rajnish Kumar told BTVi.
The two companies, last evening, announced a blockbuster deal under which Reliance Jio, promoted by Mukesh Ambani, will acquire the wireless assets of the troubled RCom, a company owned by younger sibling Anil Ambani.
The transaction, which includes acquisition of spectrum, towers, and optical fibre network is estimated, by the banking circles, to be in the range of Rs 24,000 crore to Rs 25,000 crore.
"In general terms, I can say that it is a very good and welcome development where the banks have been fully protected and no loss is expected despite the fact that there is a stress in the telecom sector," Kumar said.
He further hoped the deal will "set a very good example for the other promoters also of the companies which are under stress".
The proceeds of the deal, slated to be completed between January-March 2018, will provide much-needed respite to the Reliance Communications (RCom) whose debt stands at a staggering Rs 45,000 crore. The company hopes to use the entire proceeds to pare its debt.
Just two days before the deal was unveiled, RCom announced its exit from the strategic debt restructuring (SDR) and outlined an ambitious revival plan that involved zero write-offs to lenders.
Over a dozen banks, including SBI, PNB, and Bank of Baroda, have an exposure to Reliance Communications.
Yesterday's deal - timed with the 85th birth anniversary of Reliance founder, late Dhirubhai Ambani - packs in 122.4 MHz of 4G Spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers, 1,78,000 kilometres of fibre and 248 media convergence nodes.
In a statement yesterday, Jio -- which amassed 160 million customers just over a year into 4G operations -- said these assets being acquired are strategic in nature and are expected to contribute significantly to its large scale roll out of Wireless and Fiber-to-Home and Enterprise services.