1. More trouble for RCom: Company’s bonds slump to record low on missed payment

More trouble for RCom: Company’s bonds slump to record low on missed payment

Debt-ridden Reliance Communications' (RCom) bonds slumped to a record low after the Anil Ambani-led company missed the deadline for an interest payment.

By: | Updated: November 7, 2017 12:59 PM
Reliance Communications, Reliance Aircel merger, Anil Ambani, Aircel, Aircel merger with reliance, RCom, reliance aircel binding agreement, mobile strategy, SDR process, NCLT, Chennai Network Infrastructure, telco's gross debt, SEBI Debt-ridden Reliance Communications’ (RCom) bonds slumped to a record low after the Anil Ambani-led company missed the deadline for an interest payment. (Image: PTI)

Debt-ridden Reliance Communications’ (RCom) bonds slumped to a record low after the Anil Ambani-led company missed the deadline for an interest payment. According to Bloomberg, the price of the $300 million of 6.5% securities, on which RCom owed the interest payment, slid 1.7 cents, to a record low of 39.4 cents.

The interest payment of about $9.75 million for RCom notes maturing November 2020 was due on Monday, according to data compiled by Bloomberg. Although, this is the first time the company has missed to pay interest on bonds, amid efforts to sell stakes in several businesses and the impending debt-restructure plan. The total debt of RCom stands at Rs 45,000 crore, of which Rs 25,000 crore is the domestic loan.

Earlier today, in a BSE filing, RCom said it was renegotiating the tower business deal with all interested parties, including Brookfield Infrastructure Group, with which its deal of Rs 11,000 crore collapsed a few days ago. In December last year, Reliance Communications had inked binding agreements to sell 51% stake in its tower business to Canada-based Brookfield Infrastructure and its institutional partners for Rs 11,000 crore but the deal fell through after the company called off its merger with Aircel.

RCom had scrapped its merger with Aircel on October 3 citing legal and regulatory uncertainties and interventions by various parties. The Anil Ambani-led group was trying to reduce its heavy debt by Rs 14,000 crore by merging its wireless business with Aircel.

Meanwhile, RCom has signed a Memorandum of Understanding (MoU) with Delhi-based Veecon Media and Television Limited to sell its non-core DTH business. According to the MoU, Veecom Media and Television Limited will take over all of Reliance Big TV’s trade and contingent liabilities and retain 500 employees.

Reliance Communications reported its third quarterly loss in a row last month. It is trying to find ways to cut debt after lenders gave it a reprieve on loan repayments until the end of 2017. Earlier this year, rating agencies Fitch and Moody’s downgraded Reliance Communications’ debt rating deeper into junk grade.

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