Anil Ambani's Reliance Group will sell its FM radio business by divesting its entire stake in BIG FM Radio to Jagran Prakashan-owned Music Broadcast Ltd (MBL) for an estimated value of Rs 1,200 crore, an official statement Monday said.
Reliance Capital and Reliance Land (a part of Reliance Capital Group) will divest their entire equity stake in Reliance Broadcast Network Ltd (RBNL) to Music Broadcast Ltd (MBL).
The move would help in reducing the loan burden of the Reliance group firms, it added.
"This transaction is part of our overall strategy to reduce exposure in non-core businesses and will reduce our debt by an estimated Rs 1,200 crore," the statement Reliance Capital CFO Amit Bapna said in a statement.
RBNL operates under the brand name BIG FM Radio network with 58 stations across the country.
MBL will initially acquire a 24 per cent equity stake of RBNL by way of a preferential allotment for Rs 202 crore.
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Thereafter, subject to the receipt of all regulatory approvals, MBL will acquire all of the remaining equity stake held by Reliance Capital and Reliance Land in RBNL at a total enterprise value of Rs 1,050 crore.
In addition, RCap will receive an around Rs 150 crore from the disposal of other assets of RBNL which do not form part of the transaction with MBL, in accordance with the regulations.
In a separate release, MBL that operates Radio City said its board Monday approved the acquisition of RBNL.
The combined network will have 79 radio stations making it the largest radio network in the country, MBL said in a release adding, "The entire transaction is expected to close in the first quarter of FY21."