Reliance Group’s Chairman Anil Ambani managed to strategize a plan to wipe out the debt that remained outstanding in the company’s books. The big corporate honcho managed this by selling stakes in the tower unit to US based company named Brookfield as a part of series of deals that will witness a merged Aircel-RCOM entity, which is speculated to form India’s fourth biggest telecom company."We set an aggressive goal for RCom, to reduce debt from Rs 42,000 crore to zero. With the proposed Aircel transaction and the Brookfield towers deal, we will already be at around Rs 15,000 crore debt, down by over 70%,"Anil Ambani said in a conversation. "Had we sold 100% of the towers business, our debt would have been near zero —our target." The outstanding interest liability that remains will be much more easily manageable.
A few years ago, RCOM was falling a little short of expectations. At that hour, Anil Ambani adopted his father’s strategy of finding opportunity in adversity leading to a two-prolonged strategy. One option was of consolidation and other to enter into an agreement with Mukesh Ambani’s Reliance Jio on spectrum sharing.
"We at RCom recognised the opportunity to embark on a strategic partnership with a major player like Jio," Ambani said. "We have now implemented a comprehensive agreement with Jio to trade and share our gold standard 850 MHz spectrum, and also share infrastructure of towers and fibre."
Anil Ambani believes that the agreement with Jio will lead to savings while gaining a technological edge.
He also said, "In a capital-intensive industry like telecom, this has converted our business model into an asset-light model for future growth, and saved the company billions of dollars, and given us access to a full next-generation 4G network on a pan-India basis."
Reference link: http://economictimes.indiatimes.com/news/company/corporate-trends/deal-with-jio-will-help-rcom-gain-technological-edge-anil-ambani/articleshow/54927029.cms