Reliance Jio Fiber Trust to raise 397.1b rupees from group firms

[MUMBAI] A trust that holds Indian billionaire Mukesh Ambani's fibre-optic assets is raising 397.1 billion rupees (S$7.39 billion) through borrowings and stake sales to units and investment firms of the tycoon's conglomerate Reliance Industries, according to a filing.

Digital Fibre Infrastructure Trust will raise about 147.1 billion rupees by issuing units and also raise 250 billion rupees through a loan from group companies to reduce existing debts and fund business expansion, according to the filing to the Securities and Exchange Board of India. The billionaire's group had been in talks with overseas funds for the capital, local media had reported earlier.

Mr Ambani, 63, who's expanded his oil-focused conglomerate into telecommunications, technology and retail, is in the midst of raising cash from the assets he created along the way from the diversification. The investment by his own group companies in the trust contrasts with the approach of his digital venture, Jio Platforms Ltd., which mopped up more than US$20 billion this year by selling 33 per cent to investors including Facebook Inc. and Google.

Reliance Industries will hold 48.4 per cent of Jio Digital Fibre, according to the filing.

After the success of his wireless carrier, which is now India's number one with 400 million users, Asia's richest man is offering broadband services across the country through his fibre-optic network. The tycoon is seeking to dominate telecommunications as he sees it as a platform to deliver many services online - e-commerce, entertainment, education and health care among others.

The transformation of Mumbai-based Reliance is a bet on India's consumers, as millions use smartphones to access such services. Mr Ambani has also started selling stakes in his retail unit. KKR & Co, Silver Lake and General Atlantic and Mubadala have invested more than US$3 billion in the business.

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Reliance had previously sold stakes in a separate investment trust that held the group's wireless tower assets to Brookfield Asset Management for 248 billion rupees.

Reliance Industries, in its annual report in June, had mentioned ongoing talks with potential investors for buying into the trust holding fibre assets.

The retail-to-refining group owns a network of 1.1 million kilometers of fibre optic cable across India that penetrate over 1,600 Indian cities and towns.

BLOOMBERG