Anil Ambani has found a buyer for Reliance Broadcast Network(RBN), which operates the Big FM radio channels, with Jagran Prakashan set to purchase the company valuing it at close to Rs 1,200 crore, people with direct knowledge of the matter said. An announcement is expected as early as Monday, said one of the people. The offer from the publisher of Hindi newspaper Dainik Jagran comes after an earlier deal with the Zee Group fell through due to a delay in getting government approvals. The sale will come handy for Ambani who is looking to raise Rs 12,000 crore by selling non-core businesses to reduce debt. Recently, Reliance Capital, the investment arm of his Reliance Group, signed an agreement with Nippon Life to sell its stake in Reliance Mutual Fund for around Rs 6,000 crore.
Mahendra Mohan Gupta’s Jagran Prakashan had in December 2014 acquired Music Broadcast Ltd (MBL), which owns FM channel Radio City, in an all-cash deal. It will acquire RBN through MBL. “RBN and MBL have reached an agreement … MBL will first pick up 24% in RBN, which does not require any permission,” said one of the people. Anil Ambani’s Reliance Group and Jagran Prakashan didn’t respond to emails seeking comment till press time Sunday. Big FM has 59 FM stations, while MBL has 39 stations under the Radio City brand. RBN will transfer the control of 45 stations to MBL once the approvals are in, and the remaining 14 once their lock-in period expires in 2020, a second person said. “The deal will make Radio City India’s largest private FM company.”
As per government guidelines, a radio company cannot sell majority stake in a new licence for three years. The lock-in period for Big FM’s 45 stations expired on March 31 last year, whereas for the remaining 14, it will be effective till March 2020. MBL is also in the process of acquiring Friends FM in Kolkata; the deal is awaiting the government’s approval. Jagran Prakashan’s offer values RBN cheaper than Zee’s Rs 1,872 crore deal, which also covered the TV channels — Big Magic and Big Ganga — operated by the Reliance Group company. An RBN executive said the new valuation also accounted for the period remaining under the FM licences, which has come down with time. “The Zee deal was signed in 2016, at that time value of the radio business was higher. But overall, value has not eroded,” he said. EY India is the financial adviser to the transaction for RBN.