Millennium Post

Anil’s RCom to hive off realty assets to separate listed firm

In a bonanza for its shareholders, Anil Ambani-led Reliance Communications announced on Sunday that it is hiving off its entire real estate assets (worth Rs 12,000 crore) into a separate listed company. Besides unlocking the value of its real estate, RCom shareholders will free shares in Reliance Properties in the ratio 1:1. The indicative value of Reliance Properties shares is Rs 60 per share and the market price of RCom shares is Rs 130. This translates into an almost 50 per cent enhancement/ addition in shareholder value of RCom.

‘The Board of Directors has in principle decided on a demerger of the real estate held by RCom into a separate unit, Reliance Properties Ltd. The preliminary and indicative monetisable value of RCom’s real estate on development is estimated by independent valuers at over Rs 12,000 crore ($2 billion), which is equal to Rs 60 ($1) per RCom share,’ the company said in a statement.

The demerger is aimed at creating large shareholder value, similar value created from the initial demerger of Anil Ambani Reliance Group from Reliance Industries in 2005. The proposed separation of real estate into a separate unit is part of RCom’s strategic plan to divest non-core assets, and focus on its core wireless and enterprise business, the statement said.
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