RCom announces debt revival plan, ropes in new investors
Tribune News Service
Mumbai, December 26
Reliance Group Chairman Anil Ambani has roped in investors to help bring down the debt of his troubled telecom firm Reliance Communications (RCom).
Ambani told reporters that under the new debt reduction plan, which has the support of lenders, RCom will monetise its assets, including land holdings. The company, which has a debt of more than Rs 44,000 crore and was dragged to the National Company Law Tribunal (NCLT) by the China Development Bank, will see full debt resolution and will not involve any conversion of debt into equity, he added.
“Debt resolution involves RCom exiting strategic debt restructuring (SDR) framework with no conversion of debt into equity and zero write-off by lenders,” Ambani said. The entire process would be completed by March 2018, he added.
Ambani did not name the investor who is bringing in funds to help shore up RCom’s finances.
According to Ambani, RCom will see an eight-stage asset monetisation process under an oversight committee headed by former RBI Deputy Governor SS Mundra along with members from TRAI. The proceeds from asset monetisation will be used to pay back the lenders, including China Development Bank. Ambani said RCom has signed an out-of-court settlement with the bank on Monday in Beijing. Following the restructuring, RCom will be left with a debt of Rs 6,000 crore, he added.
“We have achieved resolution that involves Reliance Communications exiting strategic debt recast. Clearly and truly this is a historical achievement for any group. RCom debt will reduce by Rs 25,000 crore. The entire monetisation process to repay debt of lenders will be completed by January-March 2018 in a phased manner,” Ambani said at the press conference.
RCom will be a buisness-to-business (B2B) company following the restructuring, he added.
