Lenders to con­vert ₹7,000-cr RCom debt into 51% eq­uity

Anil Am­bani firm also mulls as­set sale to RJio in fresh at­tempt to pare ₹45,000-crore debt

The Hindu Business Line - - FRONT PAGE - RA­JESH KURUP

Lenders to Reliance Com­mu­ni­ca­tions will con­vert ₹7,000 crore of debt into 51 per cent of the com­pany’s eq­uity, as per the debt re­struc­tur­ing guide­lines of the Re­serve Bank of In­dia. This will bring down the pro­mot­ers’ stake to 26 per cent.

At the An­nual Gen­eral Meet­ing held on Septem­ber 26, com­pany share­hold­ers had ap­proved is­suance of eq­uity shares to lenders by con­vert­ing loans.

Ac­cord­ing to a debt res­o­lu­tion pro­posal made by RCom to its do­mes­tic and for­eign lenders, the Anil Am­bani-con­trolled com­pany is mak­ing another at­tempt to pare its ₹45,000-crore debt.

Now, RCom in­tends to re­pay up to ₹17,000 crore through mon­eti­sa­tion of as­sets and another ₹10,000 crore through sale and de­vel­op­ment of real es­tate space.

The com­pany is also look­ing to sell some of its as­sets to the Mukesh Am­bani-backed Reliance Jio. The com­pany de­clined to pro­vide de­tails of th­ese as­sets cit­ing non-dis­clo­sure agree­ments.

Un­der the lat­est pro­posal, which was made on Mon­day to the lenders, RCom is aim­ing for a ‘Zero Loan Write-Off Plan’, which means lenders don’t have to take hair­cuts.

“A trans­par­ent process has been put in process and the lenders have sent the pro­pos­als to about 26-27 com­pa­nies; it is be­lieved they have got re­sponses from a large num­ber of firms. The joint lenders fo­rum is in the fi­nal process of short-list­ing,” Pu­nit Garg, Ex­ec­u­tive Direc­tor, Reliance Com­mu­ni­ca­tions

Pu­nit Garg, Ex­ec­u­tive Direc­tor at RCom, said.

The lenders have ap­pointed SBI Cap­i­tal Mar­kets to run a bid process. RCom holds spec­trum across 800, 900, 1800, 2100 MHz spec­trum bands and in­tends to mon­e­tise this through trad­ing and shar­ing, as it con­tin­ues to fo­cus on its 4G strat­egy.

Last week, RCom said it was clos­ing down its 2G op­er­a­tions and 3G later, mov­ing its users to 4G ser­vices.

The com­pany will also mon­e­tise its ex­ten­sive tower and fi­bre port­fo­lio com­pris­ing more than 43,000 tow­ers and over 1.78 lakh route km fi­bre. The com­pany also in­tends to mon­e­tise its 248 data cen­tre prop­er­ties.

“In the next six weeks, you will know the re­sults of the process,” Garg added.

The com­pany ex­pects the mon­eti­sa­tion process to be done be­tween De­cem­ber and March next year, though it has a stand­still pe­riod till De­cem­ber 2018.

Among oth­ers, RJio is in­ter­ested in some of the key as­sets, Garg said, but de­clined to pro­vide de­tailed cit­ing a non-dis­clo­sure agree­ment.

Ac­cord­ing to Garg, the new RCom will have a con­ser­va­tive level of debt of ₹6,000 crore and the cost of debt will be lower due to its abil­ity to raise low-cost over­seas debt.

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