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Reliance Industries Ltd’s (RIL) deal with tech giant Facebook will help the Indian company to be become net debt-free by March 2021, according to a report by Credit Suisse.
Facebook’s investment of ₹43,574 crore in Jio platforms is the largest FDI minority investment in India.
As of December 31, 2019, net debt for the group stands at ₹1,53,100 crore (₹1,531 billion), and with Facebook's investment, this should put RIL on course to be net debt-free by March 2021, it said.
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₹43,574-crore ‘like’: Facebook picks 9.99 per cent in Jio Platforms
Largest investment for a minority stake by a technology firmOn Wednesday, Facebook announced an investment of ₹43,574 crore ($5.7 billion) for a 9.99 per cent minority stake in Jio Platforms. The deal follows the restructuring announced in October 2019, when RIL transferred ₹1,08,000 crore of debt from Jio to a standalone entity and leaving liabilities of ₹64,000 crore (spectrum liabilities and capex creditors) at Jio.
RIL had restructured its digital business into one consolidated wholly-owned subsidiary - Jio Platforms - which hosts all digital initiatives of the firm, including Jio digital services (mobile, broadband), Apps, tech capabilities (AI, Big Data, IoT) and investments (like Den, Hathway).
Facebook's investment into this entity will further RIL's digital initiatives, it added.
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Ambani said that at the core of the partnership is the commitment that Mark Zuckerberg, founder of Facebook, and he shares for the all-round digital transformation of India and for serving all Indians.The subscriber base of Jio has increased to 388 million now, implying net additions of 18 million subscribers in the fourth quarter of FY20. The new additions have been impacted due to reduced Mobile Number Portability activity during the nation-wide lock-down, it added.
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