RCom To Merge DTH Business With Digicable Networks
RCom may merge its DTH and IPTV business with Digicable Network Private Limited. The deal if goes through will be an all stock deal.
RCom will spinoff its DTH business into a seperate entity, which will be merged with Digicable. RCom will hold 60% stake in the merged entity while the balance 40% stake will be with the shareholders of Digicable.
With this deal, Digicable will get access to RCom's optical fibre network and in turn, Rcom will gain access to Digicable's wide customer base.
Transaction Reference: ET
PE firm Ashmore holds 49% stake in Digicable and the balance 51% is with the founder Jagjit Singh Kohli and his associates. It is not clear whether Ashmore will exit after the merger. Ashmore had invested Rs 41 Cr for a 49% stake in Digicable in 2007.
Digicable Network was set up in 2007 by Jagjit Singh Kohli and Yogesh Shah. It is into cable TV distribution and broadband services. In 2008, It had acquired 51% in Kolkata-based CableComm Services Pvt. Ltd to expand in the eastern region.
At present, Digicable claims to have over 8mn subscribers in 70 cities in India. Last year, Digicable signed a 10-year deal with IBM for an initial payment of $83mn.
RCom is restructuring its telecom tower arm - Reliance Infratel. It will merge it with GTL and Anil Ambani will take a majority stake in the merged entity from his personal capacity.
RCom has recently announced its plans to sell as much as 26% stake in the firm to repay debt and expansion of its 3G network which it currently paid Rs.8,500 Cr.
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