RIL Stake Acquisition Deal in Hathway and DEN Gets Clearance from CCI, Reliance Jio to Fasten FTTH Rollout

Only a few months back, to facilitate last mile connectivity in its fixed-line project, Reliance Jio GigaFiber bought a majority stake in two cable companies DEN Networks and Hathway Cable and Datacom. As per a new report, the Competition Commission of India (CCI) has granted clearance to Reliance Industries Limited (RIL) to acquire the said stake in the two cable companies. Back in October, RIL had claimed 66% stake in DEN Networks for Rs 2290 crore and 51.3% stake for Rs 2,940 crore in Hathway Cable and Datacom. On top of that, RIL had acquired a minority stake in GTPL Hathway.

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Use of SPVs to Facilitate Acquisition of Stakes in Cable Companies

Now the telecom and oil behemoth will go on to make an open offer to public shareholders of the three companies. The stake acquisition by RIL will be accomplished by six special purpose vehicles (SPVs) which will be owned and controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited, a wholly-owned subsidiary of RIL, is the sole beneficiary.

Reliance Industries Limited, in its BSE filing said, “It is hereby intimated that the approval of the Competition Commission of India has been received on January 21, 2019, for the above acquisition by six SPVs 100% owned and controlled by Digital Media Distribution Trust of which Reliance Content Distribution Limited, a wholly-owned subsidiary of the Company is the sole beneficiary.”

The company also noted that this new approval would allow for the subscription of preferential issue of equity shares by DEN and Hathway and purchase of equity shares of DEN from the existing promoters, as it was laid out according to the disclosure on October 18, 2018.