This will create the largest digital services platform company in India, Mukesh Ambani-owned Reliance Industries Ltd said.
Mukesh Ambani-owned Reliance Industries Ltd on Friday said it will set up a wholly-owned subsidiary (WOS) for digital platform initiatives, announcing a Rs 1.08 lakh crore investment in the unit.
The subsidiary will also acquire RIL's equity investment of Rs 65,000 crore in Reliance Jio Infocomm Ltd (RJIL), the company said in a statement.
The Board of Directors of RJIL approved a scheme of arrangement between RJIL and certain classes of its creditors including debenture holders for transfer of identified liabilities of up to Rs. 1,08,000 crore to RIL.
The board also approved the 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 to subscribe to this issue, it said.
With the new move, RJIL will become virtually net debt-free company by March 31, 2020, with exception of spectrum-related liabilities, it noted.
This will create the largest digital services platform company in India. With the formation of the new subsidiary, RIL's total capitalisation in digital platform services will rise to Rs 1.73 lakh crore, including existing Rs 65,000 crore.
"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. Jio has been heralding the digital services revolution in India and will continue to do so in the years to come," RIL Chairman and Managing Director Mukesh Ambani said.
Mr Ambani said 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.
Reliance already has several digital platforms including MyJio, JioTV, JioCinema, JioNews and its music app JioSaavn.
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