Social media major Facebook is reportedly planning to buy a 10 percent stake in the country’s biggest telecom company Reliance Jio. Reliance Industries Limited had set a target to make its telecom services arm Jio debt-free by March 31, 2020.
According to Financial Times, Facebook is looking at buying a multibillion-dollar stake in Reliance Jio which has been valued at USD 60 billion by analysts at Bernstein.
The FT report said Google had also been talking to Jio separately, citing one of the people above. Microsoft had said last year that it would provide cloud-computing services to businesses along with Jio. India is the biggest market for Facebook with 328 million monthly users and the company’s WhatsApp messaging app has 400 million users in the country, also the most in the world.
A deal with Facebook will help Ambani achieve his ambition of cutting parent company Reliance Industries Ltd’s debt to zero by March 2021, the FT said. Reliance Industries aims to sell a 20% stake in its refining business to Saudi Aramco as part of this exercise. Ambani had spoken of plans to turn Jio into a separate company last year and said there was interest from potential investors at the time.
Reliance Industries (RIL) in October had announced to set up a new subsidiary to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit.
Jio apps like JioTV, JioCinema, JioNews, etc are to be brought under this new entity in a move to consolidate digital platforms into an elegant capital structure to increase attractiveness and simplify the structure for possible strategic investors.
On March 18, RIL took over some of the debt of Reliance Jio but the company neither disclosed financial details of the transaction nor the names of creditors.
In March last year, assets worth about Rs 1.25 lakh crore were demerged from RJIL to Infrastructure Investment Trusts (InvITs) aimed at optimizing operational efficiencies and better monetization of core digital connectivity platform, tower, and fiber passive infrastructure.