India's Reliance Industries Ltd disclosed Monday that private equity group Silver Lake will inject roughly $750 million in its digital unit, days after raising an investment of $5.7 billion from Facebook Inc, enhancing its debt-cutting initiative.
The deal leads to a wave of finance-raising efforts reported in recent weeks by the oil-to-telecoms giant, including a $7 billion share sale, with plans to remove $21.4 billion in net debt by year end.
After Facebook paid $5.7 billion to buy a 9.9 percent stake in Jio, the two companies revealed their agreement less than two weeks after. The Silver Lake deal gives Jio Platforms a $65 billion market price tag, approximately 12.5 per cent higher compared to the Facebook deal figure.
Jio Platforms is part of Reliance Industries, a massive petroleum to property empire owned by Mukesh Ambani, India's wealthiest man.
The investment could help boost Jio's frenetic expansion, which began from scrap in late 2016 and has been a leading wireless company in India reaching almost 400 million consumers. The business has also developed its own phones and created an environment of digital video and music streaming apps, texting, e-commerce and more.
Jio used a tactic to counter the pricing of competitors to offer connectivity and digital services to a broader spectrum of the over 1.3 billion Indian population.
The business, which would have an annual sales of $8 billion based on its revenues in the first quarter and operating margins of over 40 percent, is considered a top candidate for an eventual initial public offering, sources said.
The business also holds a 5 per cent interest in Eros International, the established Bollywood studio that recently confirmed a surprise partnership with STX Entertainment of Hollywood.
Jio partnered with Morgan Stanley to steer their fundraising campaign. The recent capital infusions would allow Jio to pay off debt while meeting its ambitious growth goals.
Last week, Reliance announced a 39 percent drop in income for the March quarter, hurt by a sharp drop in oil prices and falling fuel demand, and disclosed it had attracted investor confidence in a Facebook-like deal at the time. It gave no further information.
Silver Lake has around $40 billion in collective assets under management and dedicated capital and focuses on the tech-enabled global opportunities. The company's investments included Alibaba, Airbnb, Ant Financial, Verily of Alphabet, Waymo, Dell Technologies, and Twitter.
A partnership with Jio marks Silver Lake's third important venture in just the past month, as the technology-focused acquisition company seeks bargains in the midst of the economic damage the coronavirus has caused.
