Chillin' out till it needs to be funded
The rescinding of the Non compete agreement after 10 years has seemingly been a long pending plan of action critical to Anil ambani’s Reliance. He has immediately moved in both media and telecom sectors and also transferred the Reliance Infrastructure’s Gas based power worth 1200 KW to the inactive Reliance Power.
Anil Ambani’s RCOM has gone ahead and jumped in with already jilted Etisalat of Dubai. Etisalat’s earlier transactions with Sistema had been rejected in April by FIPB probably raising questions on the Domestic partners’ contribution. Shyam Telecom would have probably peferred Sistema’s foreign partner to claim near total ownership with continued funding which might be unfortunate victim of the new regulations or the intentions game.
RCOM on the other hand has 67% Reliance ADA ownership. The first offer is for 25% of RCOM followed by a 20% open offer. RCOM’s $4 per share price might get a bid of upto $6 and cost Etisalat upto $2.2 billion fo rthe 25% and another $2 billion for the open offer brining Anil Ambani’s group’s stake down to 55% before the open offer.
Busy ‘Migration’ season
Meanwhile Tatas have also announced an acquisition in South Africa taking over an alternative nergy producer that converts coke to both the popular Motor Oils
Also, Renuka Sugars continue to report activity on the deal front and the automobile ancilliary units are reporting a great expotr situation. Of course on the inward remittance side we open in Bangalore tomorrow at the Global Investor Meet roping in an amount close to twice the state’s $75 billion GDP. Posco however has likely withdrawn despite the recent strength of road show in Korea with response from Hyundai and others.
The Reliance ADA Group is also active in Media
Reliance Media and Entertainment interests straddle Reliance Media Works which owns 200 screens across India and Reliance Media World that owns Big FM on Radio and also BIG Animation and other digital interests. This unit Reliance Media World is soon to be rebranded as Reliance Broadcast networks Limited, with a ‘renewed’ emphasis on sales and hypergrowth in poor man’s marketing media of radio and outdoors.
BIG Pictures is the unit for Film production. Reliance Media world is extending its presence to TV with a joint venture on with Sumner Redstone’s CBS ( He also owns Viacom) Interestingly, and we would be encouraged, there is a simultaneous discussion of a stake sale in CBS wordlwide which would be a good fit for Anil’s interests. He has active financing arrangements with Steven Spielberg for over 20 films.
CBS’s launch would bring a lot of good TV programming and ready sports options for Satellite and Cable providers. However Anil has to be careful that this second lease for his group are not marred by discussions of Corporate Governance and Market practices for his empire.
The Direct to Home Matrix
The last ‘incubatee’ in the convergence comms empire from Reliance Media companies is a newly christened Reliance Digital World, which is Reliance BIG Tv. The DTH arm is also going for an IPO for a 25% public stake and that would become the fourth listed media and comms company in the group if you include the GSM and broadband provider RCOM. Currently Reliaance Big TV is a fourth largest player in the hyper growth markets in DTH reaching more than a million house holds with the market having reached 20 million households in the next three months.