Reliance Industries today announced that private equity firm Silver Lake will invest about Rs 5,655.75 crore in Jio Platforms to acquire 1.15% stake in the Indian telecom network.
The development comes in less than two weeks after social media giant Facebook announced an investment of $5.7 billion for a 9.99% stake in Jio.
This (Silver Lake) investment values Jio Platforms at an equity value of Rs. 4.90 lakh crore and an enterprise value of Rs. 5.15 lakh crore which represents 12.5% premium to the equity valuation of the Facebook investment announced on April 22, RIL said in a regulatory filing.
“Silver Lake is one of the most respected voices in technology and finance. We are excited to leverage insights from their global technology relationships for the Indian Digital Society’s transformation,” Mukesh Ambani, CMD, RIL was quoted in the statement.
The American private equity giant gained prominence after it acquired PC maker Dell Inc along with Michael Dell in 2013.
The RIL statement also quoted Egon Durban, Silver Lake Co-CEO and Managing Partner as saying, “The market potential they are addressing is enormous, and we are honored and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission.”
While announcing the quarterly and full year results on April 30, Reliance Industries said it will achieve zero net debt status ahead of schedule, as it announced its quarterly and annual results. The deal will help RIL to reduce its debt burden.
The company also said the Silver Lake transaction is subject to regulatory and other customary approvals.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.