The debt hit Indian telecom operator Reliance Communications (RCom) who is reportedly winding up its wireless business has come up with a comprehensive debt repayment plan. This includes the telco raising up to 17,000 crore rupees through the sale of its assets.
SBI Capital Markets Limited has been appointed by the lenders as the advisor to run a competitive process to monetise the assets of RCom. The telco will pay off up to Rs 17,000 crore of debt from the monetisation of assets including spectrum, towers and fibre and media convergence nodes.
Besides, RCom will pay its domestic and foreign lenders an additional Rs 10,000 crore through the sale of its commercial real estates. This includes sale of its commercial real estate in the Dhirubhai Ambani Knowledge City in Mumbai and other prime real estate assets across eight metros.
Importantly, lenders would also take over 51 percent stake in RCom. That’s by converting Rs 7,000 crore of debt into equity, as per the SDR guidelines of the RBI.
So, essentially Anil Ambani is losing his grip and control over RCom. There have been reports that Reliance Jio is interested in buying out the 51 percent stake in RCom from the lenders when put on sale.
Future of RCom
After the sales of its assets, RCom will be left with only the B2B business portfolio. The “new RCom” according to the company would have a sustainable and profitable B2B non-mobile business. The telcos B2B business portfolio include enterprise, carrier, Internet data centre and global submarine cable network in India and overseas across continents.
“These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst low competitive intensity. New RCom will rank among the Top 3 data players in India,” the company said in a statement.
“The new RCom will have a sustainable and conservative level of debt of only Rs 6,000 crore. Cost of debt will be lower due to the ability to raise debt funds overseas at low cost,” the company added.
RCom is currently under a standstill period for interest and principal repayments, until December 2018. The telco is expected to complete the SDR process as per applicable RBI guidelines.