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Jio gets NCLT 'Ok' to demerge fibre, tower assets

The company is seeking regulatory approvals for demerging the fibre and tower businesses into Jio Digital Fibre Pvt Ltd and Reliance Jio Infratel Pvt Ltd, respectively.

ET Bureau|
Mar 22, 2019, 09.00 PM IST
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The telco operates about 220,000 towers, including third-party ones and over 300,000 route kilometres of fibre.
NEW DELHI: Reliance Jio Infocomm (Jio) has received a nod from the company law tribunal to hive off its fibre and tower businesses into two separate units, which the telco hopes to monetize in the near future.

“Further to our letters dated December 11, 2018 and February 19, 2019, we would like to inform that the Hon'ble National Company Law Tribunal, Ahmedabad Bench, vide its Order dated March 20, 2019, has approved the Scheme”, said the operator in a regulatory filing on Friday .

The company is seeking regulatory approvals for demerging the fibre and tower businesses into Jio Digital Fibre Pvt Ltd and Reliance Jio Infratel Pvt Ltd, respectively.

ET has reported that after transferring fibre and tower assets into the two separate companies, the Mukesh Ambani-owned company will monetise them via a sale and leaseback or InvIT (investment trust) structure.

Canada's Brookfield is reportedly expected to buy into Reliance Jio Infratel.

According to a separate ET report, this month global pension and sovereign wealth funds infrastructure-focussed financial investors have been sounded out as Jio’s efforts to monetise its pan India optic fibre assets to deleverage its balance sheet.

The telco operates about 220,000 towers, including third-party ones and over 300,000 route kilometres of fibre.

“The end objective will be to have different set of investors who would want to run these companies. This means that these assets go off our balance sheets, so the liabilities also go down,” RIL’s joint chief financial officer (CFO) Srikanth Venkatachari told reporters in January during its third quarter results .

The operator which is betting big on home broadband and enterprise service has its competitors following a similar strategy as well. Bharti Airtel and Vodafone Idea too have separated or are in the process of separating their fibre assets.

Sunil Mittal-led Bharti Airtel in fact is in talks with Vodafone Idea to create a fibre joint venture similar to their co-owned tower company, Indus Towers.

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