The board of directors of Reliance Industries Limited (RIL) has approved the formation of a wholly-owned subsidiary (WOS) for Digital Platform initiatives and investment of Rs 1.08 trillion in the WOS through OCPS.
The WOS will also acquire RIL’s equity investment of Rs 650 billion in RJIL.
RIL has proposed to set up this new age digital technology platform entity with the following agenda-
- Holding all digital platforms including RJIL, the Digital Connectivity Platform
- Further development of initiatives of cutting-edge technologies
- Fostering inclusive digital society through collaborations & partnerships
- Capital and organisation structure that is benchmarked to global digital technology players
- Compelling investment thesis with unencumbered capital structure, and
- Enabling early monetisation opportunities
Debt reduction in RJIL
The board of directors of RJIL have also 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 trillion to RIL;
- Rights issue of optionally convertible preference shares (OCPS) aggregating up to Rs 1.08 trillion for the purpose of payment of consideration for transfer of identified liabilities – WOS to subscribe to this issue.
Consequent to the above, RJIL will become virtually net debt free company by March 31, 2020, with exception of spectrum related liabilities. The proposed consolidated structure will be compliant with all statutory requirements.
Commenting on the formation of the Platform Company, Mukesh D. Ambani, chairman and managing director, RIL, said, “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. Given the reach and scale of our digital ecosystem, we have 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.”