Anil Ambani-led Reliance Communications Limited (RCom) today entered into binding Memorandum of Understanding (MoU) with Veecon Media and Television Limited, for sale of its subsidiary Reliance BIG TV Limited (RBTV), engaged in the business of Direct to Home (DTH) services across India.
At the end of the October 2017, RCom said that it’s going to shut down its DTH arm business, Reliance Big Digital TV with effect from November 18, and it even tied with TataSky to ensure a hassle-free migration to the consumers.
However, Veecon Media and Television Limited (VMTL) has now come forward and looking to take over all the RBTV’s trade and contingent liabilities. “Pursuant to the transaction, Veecon Media will acquire the entire shareholding of RBTV with business on “as-is where-is” basis, along with all existing trade liabilities and contingent liabilities,” said RCom in a press statement.
“The existing DTH license of BIG TV shall be renewed with the submission of the required Bank Guarantees with the Ministry of Information and Broadcasting by the buyer,” added RBTV.
Under the transaction, all the existing 1.2 million customers of RBTV shall continue to enjoy uninterrupted services. It also ensures the continuity of employment for approximately 500 employees of RBTV. Having said that, the entire 500 employees of RBTV will be retained by VMTL post the transaction, which comes as a huge relief for the employees.
The transaction will help reduce the liability of unsecured creditors, benefitting all stakeholders including lenders and shareholders of RCom. The transaction is in consonance with the RCom’s stated objective to focus on B2B businesses of New RCom.
The successful culmination of the transaction is subject to the requisite approvals from licensors, regulatory authorities and lenders of RCom. RBTV has been in search of a potential buyer of the business, but the company wasn’t able to find one.
“Reliance Digital TV informs its customers that due to the expiry of our licence we will be shutting down our DTH services across India wef 18 November. Customers are advised to make alternative arrangements to keep watching their favourite TV channels. We regret the inconvenience caused,” Reliance Big TV said in a note earlier.