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
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.