Billionaire Anil Ambani, at the helm of affairs at debt-laden telecom major Reliance Communications (RCom), has decided not to draw any salary from the company for the current financial year, as per reports from PTI. Of late, RCom has been plagued by a massive debt, which has prompted international rating agencies, Moody’s and Fitch, to downgrade its rating twice in a single week.
Incidentally, Reliance Communications happens to be the most leveraged among listed Indian telecommunication carriers. The company’s net debt rose to Rs 44,345 crore at the end of the fourth fiscal quarter of the financial year 2017 versus Rs 42,803 crore at end of the third fiscal quarter.
To add to its debt woes, the company suffered a consolidated net loss of Rs. 966 crore in the fourth fiscal quarter of FY17, compared to a Rs. 90 crore net profit in the corresponding period a year earlier. Revenue from operations fell about 24 percent from a year earlier to Rs. 4,312 crore. The company said in a BSE filing that it incurred losses due to free offers, disruptive pricing and hyper competition prevailing in the telecom sector.
The company has delayed repayment of loans to more than 10 banks. In its quarterly results statement, however, Reliance Communications said that ‘pending formal confirmation by the lenders for waiver of certain loan covenants’, some loan amounts would continue to be classified as non-current liabilities.
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RCom is merging its wireless business with rival Aircel and is also selling a 51 percent stake in its radio masts business to Canada’s Brookfield Infrastructure Group for Rs 10,000 crore. The company plans to repay Rs 25,000 crore worth of loans to its lenders with proceeds from its deals with Aircel and Canada’s Brookfield Infrastructure. The company has approached lenders and bondholders to defer loan repayments till at least September 30 so that it can finalise the two deals.
RCom has also said that it aims to further cut debt by selling real estate in Delhi and Navi Mumbai. Gurdeep Singh, CEO, Consumer Business, Reliance Communications, said that as a part of the company’s plan reduce debt further, Anil Ambani group’s office complex in the erstwhile Ranjit Hotel (near Connaught Place) in Delhi, and the sprawling Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai are on the block.