RCom rejigs debt to exit SDR with zero write-off

EVEN TATAS HAD TO GIFT AWAY TELECOM BIZ: AMBANI

Announcing a new debt resolution plan, Reliance Communication on Tuesday said the company would exit the Strategic Debt Restructuring plan (SDR) with a zero write-off to lenders and would slash its debt by `25,000 crore through sale of some of its spectrum, tower and real estate assets.

“We have achieved full resolution for Reliance Communications. The resolution involves RCom exiting structured debt restructuring with no conversion of equity and zero write-off by lenders,” said Anil Ambani, chairman, RCom.

Upon completion of all deals as announced, the balance debt in RCom is expected to be `6,000 crore only, representing reduction of over 85 per cent of the total debt. Following the announcement, the shares jumped 30.78 per cent on BSE.

Earlier, as part of the debt-restructuring plan, lenders had agreed to convert part of their debt (`7,000 crore) to equity to gain a majority control (51 per cent) in the company.

He added that the repayment of debt would be completed in a phased manner between January Mumbai, Dec. 26: Months after voicing fears of an emerging monopoly in the sector and a forceful shutdown of RCom’s consumer business, Anil Ambani on Tuesday said telecom has become a money guzzler where only those with deep pockets can survive.

Even the “mighty” house of Tatas had to “gift away” their telecom business (to Airtel), Mr Ambani asserted, sounding bitter about the regulatory framework, saying to March 2018.

The monetisation process is being carried out under the oversight of an independent high-powered bid evaluation committee headed by former RBI deputy governor S.S. Mundra.

RCom will receive equity infusion from global strategic partners for debt reduction, consequent upon a stake sale process that is already underway.

The commercial development of the Dhirubhai Ambani Knowledge City campus will lead to reduction of RCom’s debt by a further `10,000 crore, with the long time taken to clear RCom’s merger with Systema Shyam represents the “unease of doing business”.

“This is a crisis of the wireless telecom sector and it has engulfed many, many people and many, many companies. If it is the mighty house of the Tatas who had to gift their business, then very little has to be said about other corporate groups. The writing was on the wall,” the RCom chairman said. — PTI the special purpose vehicle holding the realty assuming non-recourse long-term debt financing of the said amount.

The total development potential as per prevailing regulations is estimated at over 20 million square feet of commercial, residential and retail space, the company said.

RCom’s continuing operations will comprise stable and profitable B2B-focused businesses, including Indian and global enterprise, internet data centres and the largest private submarine cable network in the world.