New Delhi, Dec 29 - A day after Reliance Communications (RCOM) announced it was selling its wireless assets to Reliance Jio, State Bank of India Chairman Rajnish Kumar termed it a good development and would hopefully set an example for other promoters.
"It is a very good and welcome development. The banks have been fully protected and no loss is expected. Despite the fact that there is a stress in the telecom sector, I am hoping that this will set a very good example for the other promoters also of the companies which are under stress," Kumar said.
Reliance Jio Infocomm (RJIL), a subsidiary of Reliance Industries Limited, on Thursday announced signing of a "definitive agreement" for the acquisition of specified assets of RCOM and its affiliates.
Consequent to the agreement, Jio or its nominees will acquire assets under four categories -- towers, optic fibre cable network, spectrum and media convergence nodes -- from RCOM and its affiliates, Jio said in a statement on Thursday.
RCOM's assets which were put up for monetisation include 122.4 MHz of 4G Spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers, around 1.78 lakh km of fibre with pan-India footprint and 248 media convergence nodes, covering five million sq ft used for hosting telecom infrastructure.
Reliance Group Chairman Anil Ambani had on Tuesday said the company has achieved full resolution of Reliance Communications' debt, reducing it by Rs 25,000 crore to Rs 6,000 crore by monetising assets.
RCOM bonds jumped from 34 cents to 55 cents on announcement of asset sales to Jio, according to industry sources.
"RIL's acquisition of RCOM's wireless telecom infrastructure, while not entirely surprising, does bring synergies for RIL's telecom business which currently has lease/sharing arrangements with RCOM for some of its existing infrastructure - spectrum, towers and optic fibre backbone," analyst Morgan Stanley said in a report.
Maintaining its upward trajectory RCOM shares were trading at Rs 34.98 per share, up 12.98% at 12.37 p.m. at the BSE.