Atrump Games

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Reliance Communications at last Sold it's Tower Business- Buy Share With Midterm View

Reliance communications at last got successful in selling it's tower business to Brookfield where Brookfield will have the controlling stake.Reliance Communications will continue to use their infrastructure as Tenant with long term agreement. Reliance communications will get 11000 cr upfront in cash and 49 % economic benefit in future based on certain condition fulfillment.

Reliance communications was trying to sell the tower business for the last many years but failed to close the deal

Reliance communications EBITA is at par with the industry but EBIT is way below the industry standard given the very high debt level.

The deal closer and subsequent repayment of debt will immediately reduce Reliance communications interest burden by 30 to 35 % which in turn will boost company earnings and cash flow in big way.
the current share price if company is very low as the overhang of debt level kept the investor at bay.
It is advisable to buy Reliance communications share with midterm view and don't play around with F&O market.

Disclaimer:  consult your financial advisor before investing

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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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