RCom shares surge 35% on inking deal with Reliance Jio

Shares of Reliance Communications (RCom) advanced as much as 35 per cent in early trade on Friday after billionaire Mukesh Ambani on Thursday stepped in to bail out younger brother Anil Ambani's debt-ridden telecom firm by acquiring spectrum, tower, optical fiber network and other wireless assets.

Mukesh Ambani-led Reliance Jio inked a definitive agreement to acquire specified assets of RCom and its affiliates in an all-cash deal on Thursday.

Market and banking circles pegged the deal size at about Rs 24,000 crore, but this was not confirmed by either of the companies.


RCom said it would use the proceeds of the cash deal solely for prepayment of debt. The company, weighed down by Rs 45,000 crore of loans and the failed merger with Aircel, had been in the midst of a strategic debt restructuring (SDR) programme with the lenders.

Shares of the company wiped off some of their initial gains and were trading 19.35 per cent up at Rs 36.95 at around 9.35 am (IST). The scrip opened at Rs 34.05 and touched a high and low of Rs 41.77 and Rs 34.05, respectively, eventually closing at 36.22, up 16.99 per cent.

State Bank of India is its largest local lender while China Development Bank (CDB), which had filed an insolvency petition in the bankruptcy court to recover $1.78 billion, or about Rs 11,460 crore, its largest overall lender. Shares of SBI were trading 0.52 pe cent up at Rs 309.90.