 "RJio to raise Rs 15,000 cr via rights issue")
“The board of directors at its meeting held on September 12, 2016, has decided to make rights issue of 300,00,00,000 — nine per cent non-cumulative optionally Convertible preference shares (OCPS) of Rs 10 each for cash, at a premium of Rs 40 per OCPS, aggregating to Rs 15,000 crore,” Reliance Jio said on Monday.
The board on July 14 approved to issue 15 billion equity shares of Rs 10 each, aggregating to Rs 150 bn on rights issue basis.
However, it has now changed the instrument from equity to OCPS.
“Each OCPS shall be either redeemed at a value of Rs 50 per OCPS or converted into five equity shares of Rs 10 each at any time at the option of the company, but not later than 10 years from the date of allotment of OCPS,” the firm said.
The company has commercially started its fourth-generation services on September 5 and will offer free phone call and high-speed data services for free till December 31.
However, it is facing resistance from incumbent telecom operators which have been reluctant to provide network interconnection points, resulting in failing of most of the calls made on Airtel, Vodafone and Idea Cellular networks.
The company has launched its commercial service about a month before start of country's biggest ever spectrum auction which is set to start from October 1.
The government will put airwaves worth Rs 5.6 lakh crore in the upcoming auction. The last date for submission of application to bid in the auction with earnest money deposit in the form of bank guarantee is September 14.
According to rating agency ICRA consolidated debt level of the sector stood at Rs 3,80,000 crore in December 2015, against Rs 2,90,000 crore in March 2014 and going forward, given the estimated level of participation in the auctions, the sector debt would increase to Rs 4,60,000 crore.
