PE Firm Silver Lake Invests INR 5,655.75 cr in RIL's Jio Platforms
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US private equity firm Silver Lake will pick 1.15 per cent stake in Reliance Jio Platforms for an investment of INR 5,655.75 crore. This deal comes nearly two weeks after Facebook announced an investment of INR 43,574 crore for a 9.9 per cent stake in Jio, valuing the company at INR 4.62 lakh crore.
The deal with Silver Lake values Jio Platforms at an equity value of INR 4.90 lakh crore, as per a statement from Reliance Industries (RIL). This represents a 12.5 per cent premium to the equity valuation of the investment by Facebook.
“In the wake of the severe economic disruptions caused by the COVID-19 pandemic, globally and especially within India, this partnership with one of the most renowned tech-investors globally, Silver Lake, has special significance. Comprehensive digitisation will be a vital component of the revitalisation of the Indian economy. It is our strong conviction that no one should be deprived of the tremendous new opportunities, including those for new employment and new businesses, embedded in India’s 360- degree digital transformation,” Mukesh Ambani owned RIL stated.
Silver Lake is one of the world’s largest technology investors with investment holdings in companies such as Alibaba, Airbnb, Dell, Alphabet’s Verily, Ant Financial and Twitter, among others. The PE firm has approximately $40 billion in combined assets under management and committed capital with a team of approximately 100 investment and operating professionals located around the world.
Commenting on the significance of this deal, Ambani, Chairman and MD of RIL, said “We are excited to leverage insights from their (Silver Lake’s) global technology relationships for the Indian Digital Society’s transformation.”
Egon Durban, CEO and Managing Partner, Silver Lake said “They (Jio Platforms) have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous, and we are honored and pleased to have been invited to partner with Mukesh Ambani and the team at Reliance and Jio to help further the Jio mission.”
The deal with Silver Lake will further help RIL to cut its debt, as the company targets to become a net debt free company by March 2021. Last week RIL said it will achieve zero net debt status ahead of schedule as it is confident about completing the capital raising programme totalling over INR 1.04 lakh crore by Q1 of the current financial year.
Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels in the deal, as per RIL statement.