Rjio, global PE majors among those eyeing RCom stake

Rajesh Kurup Mumbai | Updated on January 09, 2018 Published on November 07, 2017

A total of 12 investors, including global private equity majors and new telecom entrant Reliance Jio Infocomm, have evinced interest in acquiring 51 per cent stake in debt-laden Reliance Communications (RCom). The companies are bidding for the stake held by about 24 banks led by State Bank of India.

The bidders include global PE majors such as KKR, The Carlyle Group, TPG Capital, Isquared Capital, Gateway Partners and telecom companies, including Telstra Australia, PCCW Hong Kong, Telekom Indonesia and Sistema Russia among others.

Indian telecom companies such as Vodafone India, Bharti Airtel and Reliance Jio have also thrown in their towels. The telecom companies are bidding for RCom’s data centres and 1.8-lakh km-long international submarine cable assets, sources close to the development said.When contacted an RCom spokesperson declined to comment.

Separately, RCom had also reached an agreement with its overseas lenders for sale and co-development of the company’s 125-acre campus at Dhirubhai Ambani Knowledge City, Navi Mumbai.

These are international lenders led by China Development Bank, sources added.

This asset will be handed over to them for co-development over the next 5-6 years. Against this, they will be reducing outstandings to the overseas lenders by about ₹10,000 crore.

Zero loan write-off plan

On October 30, RCom, a company controlled by billionaire Anil Ambani, launched a ‘Zero Loan Write-Off Plan’, which means lenders don’t have to take haircuts. Under the plan, lenders could convert about ₹7,000 crore of debt into 51 per cent of the company’s equity.

This was yet another attempt by the company to pare its ₹45,000-crore debt and emerge as a strong “New RCom”, Punit Garg, Executive Director at RCom, said in a recent press conference. The company was expecting the monetisation initiatives to be concluded between December 2017 and March 2018.

The ‘New RCom’ will comprise profitable and growing domestic and international B2B-centric businesses such as data centres, sub-sea cables and enterprise businesses. The company has nine data centres in India, five private submarine cable systems and an enterprise business serving more than 35,000 corporates.

The ‘New RCom’ would have annual revenues of nearly ₹10,000 crore, with a debt of ₹6,000 crore and an EBITDA of ₹1,500 crore.

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Published on November 07, 2017
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