Reliance Communications got a breather on Friday after lenders agreed to give the Anil Ambani-backed telecom service provider time till December to repay its debt.

This comes after the debt-laden company assured the lenders that it would move swiftly on the tower asset sale and merger with Aircel.

Several credit-rating agencies, including Fitch, had downgraded RCom’s debt rating on concerns that the company would default on loan repayment. The company’s share price was punished by investors over the past week as questions were being raised about mounting debt of nearly ₹45,000 crore.

After a meeting with the lenders on Friday, Ambani said: “The ongoing strategic transaction plans have been accepted by the joint forum of lenders. This is the largest-ever debt reduction in the country.”

The company is looking to repay 60 per cent of the debt through two transactions. It will first merge its wireless business with Aircel to create a new company called AirCom. RCom will hold 50 per cent in the new venture and transfer ₹14,000 crore debt into this company.

In addition, RCom is selling its tower businesses to Brookfield. Ambani said both these transactions will be completed by September. RCom will also look at a strategic stake sale of its global business, GCX, to further reduce debt.

“We expect to close the Aircel deal and tower transaction with Brookfield by September and these deals will reduce debt to ₹20,000 crore from existing ₹45,000 crore,” Ambani said.

In the event the transactions are not completed in the above time-frame, the lenders may exercise their right to convert their debt in accordance with the applicable SDR (Strategic Debt Restructuring) norms.

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