RCom to hive off real estate assets into separate company
The board of directors of the Anil Ambani-led Reliance Communications Ltd. (RCom) on Sunday approved a plan to hive off the company’s real estate assets into a separate listed company, in a move to unlock value of Rs. 12,000 crore lying idle.
This move is also aimed at reducing the company’s mounting debt of Rs. 38, 864 crore as on March 31, 2013.
With this proposed demerger, RCom shareholders would get free share of the new company called Reliance Properties Ltd. in the ratio of 1:1. The decision is subject to clearance from shareholders, lenders and courts.
The proposed separation of real estate into a separate unit is part of RCom’s plan to divest non-core assets so that the company can focus on its core wireless and enterprise business, RCom said in a statement.
The new company will work with global partners. In December 2012, RCom set up a joint venture with Chinese real estate firm Wanda Group to develop real estate at Navi Mumbai.
RCom’s prime land at Dhirubhai Ambani Knowledge City in Navi Mumbai, measuring nearly 135 acres, with a saleable area of over 15 million square feet, and another property near Connaught Place in New Delhi, measuring 4 acres, will come to Reliance Properties.