Debt laden telecom operator Reliance Communications today said it has told lenders that it would repay Rs 25,000 crore before September 30 this year, expected to be generated from two business deals. “RCom has formally advised all its lenders that it will be making repayment of an aggregate amount of Rs 25,000 crore from the proceeds of these two transactions, on or before September 30, 2017,” RCom said in a statement. RCom’s net debt stood at a whopping Rs 44,345.30 crore as on March 31 this year. The assertion comes at a time when there are growing conerns over the company’s debt repayment capability. There have been reports saying that the company defaulted on its loan obligations with more than 10 local banks.
RCom said that the Rs 25,000 crore that it plans to pay will cover not only all scheduled repayments, but also include substantial pre-payments to all lenders on a pro-rata basis. “RCom is presently engaged in discussions with its lenders to obtain their requisite consent for the two transactions and to refinance scheduled instalments falling due in the interim period up to September 30, 2017, to facilitate expeditious closing of both transactions in the best interests of all stakeholders,” an RCom spokesperson added.
Bleeding from an intense tariff war, RCom posted a loss of Rs 948 crore for the fourth quarter ended March 2017 compared to a net profit of Rs 79 crore in the corresponding period of the previous year.
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The company registered its first-ever consolidated loss in the qurter ended December 2016. “Based on the large number of approvals already received for the two transactions and continuing good progress for the balance, RCom expects to meet all its debt repayment obligations in line with these plans, and substantially reduce its overall debt,” the RCom spokesperson said.
As per rating agency ICRA, the debt protection metrics of RCom have further deteriorated with increase in debt and weakening in profitability. RCom’s debt-to-EBITDA ratio increased to 7.76 times (annualised) as on the nine month of financial year 2017 from 6.68 times as on fiscal year 2016-end, ICRA said.