Reliance Communication (RCom) shares rose over 5 per cent on Monday after the company on Friday said that its has won 7-months from its lenders to service loans amounting to Rs 45,000 crore. RCom chairman Anil Ambani in a press conference on Friday said that debt burden will be reduced to Rs 20,000 crore with two deals by September, before the December deadline given by the lenders.
Reacting to the news, stocks of RCom rose 1.21 per cent at Rs 20.90 at 9.38 am. The share price opened at Rs 21.50 and touched a high and low of Rs 21.75 and Rs 20.85, respectively, in trade so far. Sensex was trading 16.90 points down at Rs 31,256.39 during the same time.
The debt-laden company on Friday also said that aggressive tariff war and high taxes may squeeze Indian telecom operators, leaving a gaping Rs 1,20,000 crore deficit between the industry’s earnings and its debt/payment commitments this year. The Last week, Reliance Communications was downgraded by rating agencies Moody’s and Fitch citing their possible debt default. Fitch Ratings downgraded the Anil Ambani-controlled company to CCC, while Moody’s had downgraded Reliance Communications earlier this week to Caa1 from B2.
Ambani during his Friday conference also said that the company will consider the strategic sale of the lobal business to further pare debt.
“Our plans have been accepted by the lenders and they have constituted a joint lender forum (JLF). Reliance Communications, under the provision (SDR), will receive a standstill on serving debt obligations for period of 7 months, that is, till December 2017,” Ambani said.