Music Broadcast terminates Rs 1050 crore acquisition deal with RBNL
The acquisition has been terminated since the parties have not yet received approval from the MIB and the long stop date under the definitive agreements has expired
"The approval for the proposed acquisition in Big FM was subject to clearance/approval from the Ministry of Information and Broadcasting, Government of India. The parties have not yet received approval from the MIB and the long stop date under the definitive agreements has expired. Therefore, the Board of Music Broadcast Limited has now decided to not pursue the proposed transaction and will terminate the definitive transaction documents. This event will not have any impact on the ongoing business operations of the Company," the company added.
Anil Ambani-led Reliance Group's Reliance Capital and Reliance Land (a part of Reliance Capital Group) had agreed to divest their entire equity stake in RBNL to (MBL) for a total enterprise value of Rs 1,050 crore. RBNL operates under the brand name BIG FM Radio network with 58 stations across India.
As part of the agreement, MBL had initially agreed to acquire a 24% equity stake of RBNL by way of a preferential allotment for a total consideration of Rs. 202 crore and thereafter subject to the receipt of all regulatory approvals, it would have acquired all of the remaining equity stake held by Reliance Capital and Reliance Land in RBNL at a total enterprise value of Rs 1,050 crore.
The debt-ridden Reliance Group has been divesting assets to bring down debt. Reliance Capital was to receive an estimated Rs 150 crore from the disposal of other assets of RBNL which do not form part of the transaction with MBL, in accordance with the regulations. In aggregate, the transaction would have reduced Reliance Capital’s outstanding debt by an estimated Rs 1,200 crore.
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