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Anil Ambani’s Reliance Communications (RCom) has unveiled a plan to exit its ongoing Strategic Debt Restructuring (SDR) exercise and reduce its debt by 87 per cent to about ₹6,000 crore.
The plan, which will also on-board a strategic investor in the “new RCom”, is expected to be closed in a phased manner between January and March 2018. The new plan, which has the backing of all the RCom lenders, including Chinese bankers, will neither involve any conversion of debt into equity nor any haircuts and write-offs for lenders, Reliance Group chairman Anil Ambani told reporters on Tuesday.
While not naming the new investor, Ambani said Credit Suisse was looking into the process, which was at an advanced stage. Ambani returned last morning from Beijing after meeting top Chinese lenders and government officials.
Asset sales
RCom will sell its spectrum, towers, optical fibre and certain real estate assets — excluding the Dhirubhai Ambani Knowledge City campus in Navi Mumbai (DAKC) — for about ₹25,000 crore. These also include 122.4 MHz of spectrum in the 800, 900, 1800 and 2100 MHz bands, more than 43,000 towers, 1.78 lakh route km of fibre and 248 media convergence nodes (used for hosting telecom infrastructure), Ambani said.
The debt-laden RCom will commercially develop DAKC through a Special Purpose Vehicle (SPV) that will help the company reduce its debt by a further ₹10,000 crore. DAKC comprises 125 acres of prime real estate in Navi Mumbai and the complex is proposed to be commercially developed under the Maharashtra government’s ‘Integrated Information Technology Township’ scheme over the next 10 years.
Further, a global private equity player has consented to invest another ₹4,000 crore in the company. On completion of these transactions, RCom’s debt will fall to a “conservative” ₹6,000 crore, from ₹45,000 crore. “These transactions will lead to about 87 per cent reduction in RCom’s total debt and liabilities, the largest ever in the history of corporate India. What we have achieved, in the face of extraordinary challenges, is truly historic and unprecedented in Indian corporate history,” Ambani said.
“We have received all final binding bids and expect full and financial closure between January and March 2018,” Ambani added.
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