Facebook in talks to acquire a 10% stake in Jio
Social media czar Facebook is in talks to acquire a 10% stake in Indian telecom giant Reliance Jio. For the first time, the top telecom operator will dilute its stake for a strategic investment. Till date, Mukesh Ambani-led Reliance Industry has infused over $25 billion capital in the subsidiary.
The Mark Zuckerberg-led company was close to signing a preliminary deal with Jio. However, worldwide travel ban due to coronavirus pandemic has postponed the agreement further, says a report.
The stake sale would be important for Reliance Jio, as the company is looking to pay back most of its debt by 2021. The company had reported total debt of nearly Rs 1,450 crore in FY19 and was forecasted to reach more than Rs 1,700 crore by the end of FY 2021.
As per Bernstein analysts, Neil Beveridge and Chris Lane, RIL’s wholly-owned subsidiary is expected to post a profit next year, and by FY23 it will likely overtake RIL’s energy business to become the largest Ebitda contributor.
Apart from telecom, Jio has a gamut of products, including digital payments via UPI, music streaming app JioSaavn, grocery platform JioMart, on-demand TV service JioTv, among several others.
Recently, Jio had applied for permission from the government to undertake 5G trials. If allowed, Jio will be the first company to offer 5G services based on technology and design developed by itself.
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