Besides unlocking the value of its real estate, RCom shareholders will get free shares in Reliance Properties in the ratio 1:1.
Indicative value of Reliance Properties shares is Rs 60 apiece and market price of RCom shares is Rs 130. This translates into almost 50 per cent enhancement / addition in shareholders' value of RCom.
"Board of Directors has in principle decided on a demerger of the real estate held by RCOM into a separate unit, Reliance Properties Ltd. The preliminary and indicative monetisable value of RCom's real estate on development is estimated by. Independent valuers at over Rs 12,000 crore ($2 billion), which is equal to Rs 60 ($1) per RCom share," the company said in a statement. (Read full statement here)
The demerger is aimed at creating large shareholder value. Similar value was created from the initial demerger of Anil Ambani's Reliance Group from Reliance Industries in 2005.
The proposed separation of real estate into a separate unit is part of RCom's strategic plan to divest non-core assets, and focus on its core wireless and enterprise business, the statement said.
Reliance Properties will be a separate listed company and will work with leading global partners to develop the real estate.
All shareholders of Rcom will receive fully tradeable pro-rata shareholding in Reliance Properties Ltd, free of cost, based on their existing shareholding in RCom, it said.
The properties proposed to be developed by Reliance Properties include prime land at Dhirubhai Ambani Knowledge City in Navi Mumbai measuring nearly 135 acres, with saleable area of over 15 million square feet and its another property near Connaught Place in New Delhi spread across nearly 4 acres.
"The board has constituted a committee to consider the matter in detail, and prepare the necessary demerger scheme, etc. in consultation with legal and other advisors. The demerger will be subject to approvals from shareholders, lenders, courts, etc," the statement said.
The entire process may take 3 to 4 months. In December 2012, RCom had announced setting up a joint venture with Chinese real estate firm Wanda Group.
Net debt of the company stood at Rs 38,864 crore by end of March 2013.