Shares of Reliance Communications rallied as much as 16 per cent in Tuesday's trade as lenders to Reliance Communications will convert ₹7,000 crore of debt into 51 per cent of the company’s equity, as per the debt restructuring guidelines of the Reserve Bank of India. This will bring down the promoters’ stake to 26 per cent.

At the Annual General Meeting held on September 26, the company shareholders had approved issuance of equity shares to lenders by converting loans.

Following a positive open at Rs 16.60 against the previous close of Rs 15.70, the shares touched an intraday high of Rs 18.20 and a low of Rs 16.50.

RCom shares ended the session higher by 9.24 per cent at Rs 17.15 on the BSE. On the NSE, the stock gained 8.89 per cent at Rs 17.15.

Last week, the company had said that it is pulling the plug on its 2G services in a bid to stop losses.

Debt-laden Reliance Communications will shut down all 2G mobile operations by November 30. This will lead to about 1,500 job losses, according to industry sources. Subscribers will be given the option to either shift to its 3G/4G network or port out to another operator.

Reliance Communications’ decision to call off the merger plan with Aircel has raised a number of questions around the company’s ability to pare its debt of nearly ₹45,000 crore. It has also raised doubts on the proposed tower asset sale to private equity firm Brookfield.

Under the earlier plan, RCom was to park ₹14,000-crore debt from its balance sheet to the new company created post the merger with Aircel. In addition, RCom was to get ₹11,000 crore by giving 51 per cent stake to Brookfield.

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