Anil Ambani’s asset sale expands as banks get strict with borrowers

mumbai — Under pressure from lenders, the restructuring of billionaire Anil Ambani’s mobile-to-metro conglomerate is turning into a summer sale.

Companies controlled by Ambani are trying to sell road assets, an undersea cable business, and prime real estate in Mumbai and New Delhi. That’s on top of a deal to divest the group’s phone transmission towers and merge its wireless operations with Aircel. And if that isn’t enough, finance units announced two initial public offerings within a week.

With banks cracking down on borrowers and Ambani’s once high-flying mobile phone business being hammered by his brother Mukesh’s rival Reliance Jio Infocomm, Anil aims to raise over $4.5 billion this year to help reduce group debt that’s at least three times that.

The Reserve Bank of India has stepped up pressure on commercial lenders to send delinquent borrowers

Some of these assets should have been sold three to four years back Chakri Lokapriya, MD, Indian arm of TCG Group

to the bankruptcy courts if they don’t pay up, to pare the nation’s $180 billion of bad loans.

Banks in turn are pressing heavy borrowers like Anil’s phone unit, to recover loans that haven’t gone bad. None of Ambani’s group companies has yet missed the 90day payment deadline that would categorise their loans as non-performing assets.

“RBI is pushing the banks, banks are pushing the company founders and the company founders are pushing the asset sales,” said Chakri Lokapriya, Mumbaibased managing director of the Indian arm of TCG Group, which oversees around $3 billion.

“Some of these assets should have been sold three to four years back.”

Banks that lent to Anil’s companies such as Reliance Communications have met with executives from the group to push for a reduction in debt by selling assets, according to people familiar with the matter, who didn’t want to be named because the talks were private.

Anil Ambani told reporters on June 2 that RCom’s debt reduction plan would be the largest in India’s history and would create longterm value for shareholders. A spokesman for the unit declined to add to Ambani’s comments.

A group spokesman didn’t provide details of efforts to reduce group-wide debt.

RCom, as the wireless unit is known, got a seven-month reprieve from lenders this month in order to raise money from deals. It’s weighed down by $6.9 billion of debt and is losing money after a bruising mobile price war started by Anil’s elder brother.

Mukesh’s Reliance Jio launched its own service in September offering free phone calls for life and free data in the initial months. Since then, RCom’s shares have fallen nearly 61 per cent, after the stock was downgraded on fears that the company might default on some loans. — Bloomberg