RCom offers majority stake to banks

Under strategic debt rejig, asks banks to convert ~7k-cr debt into 51% stake

Anil Ambani-led Reliance Communications (RCom), which had recently said it would shut its 2G business by November, on Monday said it was asking lenders to convert part of their debt to equity for 51 per cent control of the stressed company under a “zero write-off” plan.

“Lenders will convert ~7,100 crore worth of debt into equity (under the strategic debt restructuring plan of the Reserve Bank of India). Post debt monetisation through sale of real estate assets, the company would have only ~6,000 crore of debt left,” said Puneet Garg, executive director and chief financial officer.

The company said the zero write-off plan for its lenders would help it to repay over ~27,000 crore. Repayment would be by raising ~17,000 crore through asset monetisation of spectrum, towers, fibre network, and media convergence nodes. Another ~10,000 crore would be raised and repaid through sale of real estate assets across eight metro cities. The company is working with SBI Capital Markets Ltd (appointed by banks) on the same.

RCom holds 122.4 GHz worth of spectrum across 800, 900, 1800 and 2100 MHz bands. It has already announced plans to shut down its 2G business and focus completely on 4G. “The remaining RCom will largely be focused on our B2B business, which is annuity like, profitable, sustainable and predictable business,” Garg said.

The company had to reassess their ~45,000-crore debt repayment plans after their much-awaited merger with another troubled telco, Aircel, fell apart.

“RCom's B2B business portfolio comprises enterprise, carrier, internet data centre and global submarine cable network in India and overseas across continents. The new RCom will rank among the top three data players in India,” said Garg.