Reliance Will Spin-Off Real Estate Business

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India telecommunications giant Reliance Communications plans to spin-off its real estate holdings into a separate company worth about 120 billion rupees ($1.99 billion).

Reliance shareholders will receive free shares in the new entity, Reliance Properties. Its assets will 135 acres of land near Mumbai and about 4 acres in Delhi.

Reliance, the company controlled by billionaire Anil Ambani, is India's third-largest telecom by users. According to news reports, the company is looking to pare down $6.5 billion in debt.

Reliance said the new property arm will work with international companies to develop the property, including China Dalian Wanda Group. The company signed a development agreement last year with Dalian, which has become an active international player.

In addition to owning the U.S.-based movie chain AMC Entertainment, the company has been linking with high-profile projects around the world, including a £700 million hotel and residential tower project in London.

Reliance plans to develop and sell at least 15 million square feet at Dhirubhai Ambani Knowledge City in Navi Mumbai, as well as prime property in Connaught Place in New Delhi, the Wall Street Journal reports.