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Reliance Industries to invest Rs 15,000 crore more in Jio
Reliance Jio Infocomm Ltd Monday said its parent Reliance Industries will invest ₹15,000 crore more in the company through an issue of non-cumulative optionally convertible preference shares.
Reliance Jio Infocomm Ltd Monday said its parent Reliance Industries will invest ₹15,000 crore more in the company through an issue of non-cumulative optionally convertible preference shares.
This issue substitutes a rights issue that the company had planned earlier.
“The board of directors at its meeting held on September 12, 2016 has decided to make rights issue of 3 billion 9% 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,” the company said.
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 board of Reliance Jio had on July 14 approved the issue of 15 billion equity shares of Rs 10 each, aggregating to Rs 15,000 crore.
However, it is facing resistance from incumbent telecom operators who have been reluctant to provide it network interconnection points resulting in failing of most of the calls made on Airtel, Vodafone and Idea Cellular network.
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, 2016.
Government will put airwaves worth Rs 5.63 lakh crore in the upcoming auction.
Last date for submission of application to bid in the auction with earnest money deposit in the form of bank guarantee is September 14.
Meanwhile, telecom operator Idea Cellular on Monday said it will provide more interconnect points shortly to Reliance Jio network which will support call traffic of 1.85 million additional customers of the new entrant.
However, Idea said that it is incurring huge cost due to the high number of incoming calls from Reliance Jio network.
“Unless controlled, this induced traffic asymmetry is expected to exacerbate the loss in coming months,” an Idea statement said.
