Anil Ambani
Anil Ambani is facing worst time of his business career.Credit: Reuters

Anil Ambani is hoping to get himself out of the debt burden by selling BIG FM 92.7 radio channels, which operate under the Reliance Broadcasting Network (RBN), to the Jagran group. The Kanpur-based group owns Dainik Jagran newspaper and Radio City FM channels. The deal comes after an earlier bid to sell the stakes in RBN to Zee Group which had acquired two TV channels owned by Anil Ambani for Rs 300 crore.

"Together with the stake sale in Reliance Nippon Asset Management for Rs 6,000 crore and other ongoing monetisation plans, we expect Reliance Capital's debt to reduce by around Rs 12,000 crore (nearly 70 per cent) in FY20," Amit Bapna, Reliance Capital CFO, told Business Standard.

The acquisition by Jagran group's Music Broadcast Limited (MBL) worth Rs 12,000 crore will be phase-wise with 24 per cent of the Big FM radio channel networks being purchased first. This is in tandem with the government guidelines that a radio station cannot sell its majority stake for the full license control in the first three years of its inception. Anil Ambani's BIG FM currently has 59 stations. 

MBL will acquire 49 channels of Big FM first and the remaining 14 will be bought once their lock-in period expires in March 2020. The deal will result in the formation of India's largest private FM radio network when Radio City and Big FM come together after the approvals.

FM radio on mobile
AZ Research Partners data.Raghavendra N

Anil Ambani is reportedly selling the Big FM channels at a considerably cheaper price than the earlier proposed deal with Zee group that was valued at Rs 1,872 crore. The cheaper deal may be due to Anil Ambani's efforts to pay off the debt by selling his businesses across entertainment and investment divisions. Also, the radio and entertainment businesses since the RBN-Zee group's deal seemed to have witnessed a decline which accounts for the lower valuation.

Anil Ambani's tryst with the entertainment businesses began way back in 2005 when he acquired the majority stake in Adlabs Films, a media entertainment company and soon launched BIG FM all over the country amid evolving radio businesses. However, like his other businesses, Big FM radio stations also witnessed a revenue decline and was on a lookout for an active buyer since 2013.