Debt recast plan lifts RCom stock

Shares of Reliance Communications surged on a new debt resolution plan presented by the company to its lenders by offering controlling stake and through monetisation of assets including spectrum and fibre assets, among others.

The stock zoomed 9.24 per cent to close at ₹17.15 on the BSE, and on the NSE it closed 8.57 per cent higher at ₹17.10. Over 12 crore shares traded on both the exchanges. However, low deliverable volume data suggest heavy intraday trading. While on the BSE, the deliverable volume was at 22.39 per cent, on the NSE it was just 13.66 per cent.

RCom futures also saw heavy accumulation of long positions. RCom November futures added 1.358 crore shares in open interest positions, which is 11.67 per cent higher from the previous day’s close.

Reliance Communications on Monday said lenders will convert part of their debt to equity to gain 51 per cent control of the company. The Anil Ambani-firm also said that it will sell telecom tower and real estate businesses to pay off ₹27,000 crore out of ₹45,000 crore of debt on its books.

“Debt of ₹7,000 crore is proposed to be converted into 51 per cent of the company’s equity, according to the SDR guidelines of the RBI,” RCom said.

In a notice to the exchanges, RCom said it has made a comprehensive debt resolution plan to its domestic and foreign lenders, whereby the lenders would not have to write off any of their loans, it said. The ‘no-loan-write-off’ plan involves payment of up to ₹17,000 crore debt out of the proceeds of monetisation of spectrum, tower and fibre assets.

Meanwhile, the Board of RCom on Tuesday took on record the demerger of Sistema Shyam Teleservices’ telecom business in India, run under the brand name MTS, with the company.

The Board also approved the issuance of shares to the tune of 10 per cent of the equity shareholding of Reliance Communications, to SSTL, as part of the agreement between the two companies.

Under the terms of the agreement between RCom and Sistema, RCom will acquire the telecommunications business of SSTL including its licences. In addition, RCom will acquire 30 MHz of the most valuable and superior 800/850 MHz band spectrum, ideally suited for 4G LTE services and other evolving technologies, to complement its own unique nationwide footprint.