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Astro in talks to acquire Anil Ambani’s Reliance Digital TV

MUMBAI: Malaysia-based Astro, which has a 20% stake in Sun Direct, is in talks to buy out Anil Ambani’s direct-to-home (DTH) business housed under Reliance Communications.

Astro is in the process of valuing Reliance Digital TV, the DTH arm of Reliance Communications (RCom).

With RCom sitting on a mountain of debt, it is looking to sell its non-core assets including the DTH business.

Astro is carrying out due diligence of Reliance Digital TV. Valuation is being worked out by the two entities, the Times of India quoted a source as saying.

RCom, which has a total debt of close to Rs 45,000 crore, has got a seven-month reprieve from lenders to put its house in order. The company is planning to reduce its liabilities by 60% with the Aircel merger and the sale of tower assets to Brookfield. It is also looking to unload its DTH business to cut its debt.

Incidentally, T Ananda Krishnan owns stakes in both Sun Direct and Aircel. So, Krishnan and Ambani could be working out two deals. Krishnan’s Maxis Communications is the largest owner of Aircel, which is being merged with RCom’s wireless unit. In the merged entity, Aircel and RCom are going to have equal shareholding.

RCom has been mulling hiving off its DTH business for a long time. In 2013, Reliance Digital TV and Sun Direct were exploring a merger. The match between the two is an ideal one as both of them are located on the same satellite.

Reliance Digital TV is a minor player in the growing DTH business, which is witnessing consolidation with Dish TV and Videocon d2h merging to create a distribution behemoth having 28.31 million subscribers, as on 31 March.

Reliance Digital TV, on the other hand, has a meagre 2% share of active DTH subscriber base, according to the TRAI report. As on 31 December, the active DTH subscriber stood at 62.65 million. Sun Direct has a 10% share of total active DTH subscriber base.

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