Reliance Capital to sell stakes in Big FM Radio for ₹1,200 cr

Radio City will soon take over 40 stations of Reliance 92.7 Big FM, as Reliance Capital Ltd and Reliance Land (a part of the Reliance Capital Group) divest their entire equity stake in Big FM Radio.

Big 92.7 FM Radio network operates under Reliance Broadcast Network Ltd (RBNL) with 58 stations across India. Forty of these stations will be taken over by Radio City, a part of J agran Prakashan Ltd Group company Music Broadcast Limited (MBL).

The remaining 18 stations will have to be sold separately in a second leg of the transaction, as Radio City is already present in those city and there will be an overlap. Reliance expects to earn ₹150 crore from these remaining 18 stations.

MBL will initially acquire a 24 per cent equity stake of RBNL by way of a preferential allotment for a total consideration of ₹202 crore. Thereafter, subject to the receipt of all regulatory approvals, MBL will acquire all of the remaining equity stake at a total enterprise value of ₹1,050 crore.

Amit Bapna, CFO, Reliance Capital said, “We are delighted to announce the asset monetisation transaction with MBL. This transaction is part of our overall strategy to reduce exposure in non-core businesses and will reduce Reliance Capital’s debt by an estimated ₹1,200 crore.”

“Together with the recently announced stake sale in Reliance Nippon Asset Management for ₹6,000 crore and other ongoing monetisation plans, we expect Reliance Capital’s debt to reduce by approx. ₹12,000 crore (nearly 70 per cent ) in the current financial year,” he added. EY India is acting as the exclusive investment banker to the transaction, and Phoenix Legal is the legal advisor to Reliance Capital group.

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