Abu Dhabi's Mubadala to invest $1.2 billion in Reliance's Jio Platforms

Sat 06 Jun 2020, 08:16:03

Abu Dhabi-based sovereign investor Mubadala Investment Company will invest Rs 9,093.60 crore for a 1.85% equity stake in Jio Platforms. This will be the sixth investment in Jio, which has an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore.
“I am delighted that Mubadala, one of the most astute and transformational global growth investors has decided to partner us in our journey to propel India’s digital growth towards becoming a leading digital nation in the world,” Mukesh Ambani, chairman and MD of Reliance Industries, said in a statement. “Through my longstanding ties with Abu Dhabi, I have personally seen the impact of Mubadala’s work in diversifying and globally connecting the UAE’s knowledge-based economy”, he added..The transaction is subject to regulatory and other customary approvals.
Analysts said Reliance has targeted raising Rs 85,000-Rs 90,000 crore from stake sales in Jio Platforms, It has so far drawn Rs 78,562 crore in planned investments from Facebook and private equity funds Silver Lake, Vista Equity Partners, General Atlantic and KKR for a combined holding of 17.12%. The latest would take the combined holding to 18.97% and investment amount of up to Rs 87,655.35 crore .
Reliance’s stake sales will help it achieve its zero-net debt ahead of the March 2021 target. At the end of last March, Reliance had outstanding debt of Rs 3.36 lakh crore and cash of Rs 1.75 lakh crore, bringing its net debt to Rs 1.61 lakh crore.
Parent RIL also raised Rs 53,124 crore from a rights issue, which closed on Wednesday and received a robust response from shareholders as the issue got subscribed 1.59

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Mubadala invests and partners to advance Abu Dhabi’s diversified, globally integrated economy across sectors that are driving global growth and addressing critical challenges. “A significant aspect of this mandate is transformative information and communications technology investments which include cognitive computing, ICT infrastructure, telecoms, and satellite operations,” said the statement from Reliance Industries and Jio .
Morgan Stanley acted as financial advisor to RIL and AZB & Partners, and Davis Polk & Wardwell acted as legal counsel.
“We have seen how Jio has already transformed communications and connectivity in India, and as an investor and partner, we are committed to supporting India's digital growth journey. With Jio’s network of investors and partners, we believe that the platform company will further the development of the digital economy,” said Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company.
These deals are coming in on the run up to an IPO for Jio , expected in two years. Reliance has consistently talked about building Jio Platforms into a digital entity on the lines of Alphabet and Tencent.
Reliance is in talks with Saudi Aramco for selling a fifth of its oil-to-chemicals business in a $15 billion deal and has sold half its fuel retail venture to BP Plc for Rs 7,000 crore, apart from its telecommunication tower business to Brookfield for Rs 25,200 crore.
The sharp drop in global oil prices this year and demand compression in most global economies could make an Aramco deal difficult, some analysts said. The Brookfield transaction is yet to receive government clearance.

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