New Delhi, September 24, 2018: Ambani addressed the shareholders of all group companies, including RCom
At the 14th annual general meeting (AGM), Reliance Communications (RCom) chairman Anil Ambani bid adieu to the telecom business, owing to intense slugfest in the sector.
However, Ambani gave a ray of hope to shareholders. He unveiled a new source of redemption through development plans for the 133-acre Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai.
According to reports published in business-standard.com as we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business (which includes enterprise, data, submarine and long distance international voice calls). Reliance Realty (a subsidiary of RCom) will be the engine of growth for the future of this company. We are unlikely to have any telecom sector exposure in the long run,” he said.
Ambani addressed the shareholders of all group companies, including RCom, Reliance Infrastructure, Reliance Power, Reliance Capital, Home Finance and Nippon Life AMC in one go with a little more than hour allocated to each company. However, the overarching statement was that RCom is exiting the telecombusiness completely once the regulatory approvals for spectrum sales to Mukesh Ambani’s Reliance Jio receive clearance.
“At the end what matters for customers is the value proposition and I hope the current value proposition will remain and there will be no future tariff shocks as the industry consolidates because that will be detrimental to all consumers.” In response to queries on the future of 5G and capex requirement for telecom services, Ambani made it clear that these concerns have been so “challenging” that the company has decided not to proceed in this sector.
RCom completes sale of fibre assets to Reliance Jio for Rs 30 billion
Notably, shareholders raised concerns around the dividend returns, some even requesting a token dividend while the group companies await complete debt resolution which Ambani said would be addressed next financial year. With respect to RCom specifically, shareholders were concerned about the timeline for asset monetisation plans across the businesses and DAKC development graph. Ambani matriarch Kokilaben Ambani was conspicuous by her absence through most of the AGMs during the day.
For Reliance Infrastructure, Ambani reiterated that 100 per cent of the Rs 188 billion accrued from the sale of Mumbai power business to Adani Transmission will go towards the company’s zero debt target by next year. He said options for shareholder value creation like buybacks will also be addressed once the company is debt free next year. In a first, Ambani took queries from shareholders before addressing them. “It is an unfortunate fact about doing business that despite amendments to the arbitration Act by the central government and clarity from the Supreme Court… many government entities continue to drag their feet on arbitration award payouts,” he said. This was said in respect to the Rs 60 billion worth of arbitration awards that RInfra is expecting from Delhi Metro Rail Corporation, NHAI among others according to business-standard.com
During the Reliance Power AGM, Ambani made a special mention of Prime Minister Narendra Modi’s efforts towards reducing the cost of renewable energy over the past three years while maintaining the need for “stability of supply costs and energy” which continues to be the reason for investing in coal-based energy.
