Billionaire Anil Ambani on Tuesday, September 18, announced that the cash-strapped Reliance Communications will be completely exiting the telecom business to concentrate on real estate.
The first priority for RCom, which is credited for democratising telecom services through cheaper offers in early 2000s, is to resolve its debt worth over Rs 40,000 crore, he told shareholders at the company's 14th annual general meeting (AGM) in Mumbai.
"We have decided that we will not proceed in this sector. And many other companies have taken a similar call. This is very much a writing on the wall, the future... As we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business. Reliance Realty will be the engine of growth for the future of this company," Ambani said to PTI.
Pointing out to the 133-acre Dhirubhai Ambani Knowledge City (DAKC) on the outskirts of the financial capital, he said there is a huge realty play opportunity that RCom's erstwhile corporate headquarters possesses, and pegged the potential value creation at the site at Rs 25,000 crore.
A report in NDTV quoted Ambani as saying that he is confident of getting a resolution in the next few months and added that other monetisation measures, including the sale of telecom infrastructure and fibre to Reliance Jio, are at an advanced stage of closure. He said the company is awaiting final approvals for spectrum sharing and trading from the Department of Telecom (DoT).
Anil Ambani also thanked his elder brother Mukesh Ambani, who is credited with conceptualising the undivided group's telecom foray and also bought the assets as part of the beleaguered RCom's monetisation efforts.
Reliance Realty is a wholly-owned subsidiary of RCom, which will develop the DAKC in Navi Mumbai, he said, adding that it is an already registered IT and fintech park. RCom owes over Rs 40,000 crore to a group of 38 lenders, including Chinese banks, and was resolving the debt through a strategic debt restructuring (SDR) process.