Reliance Communications (RCom) chairman Anil Ambani announced on Tuesday that the telco has arrived at a debt resolution plan that involves its exit from the strategic debt restructuring (SDR) scheme without conversion of any debt into equity by the lenders. “We have achieved a full resolution for RCom. The resolution involves RCom exiting from an SDR framework, involves no conversion of any equity to lenders, fully protecting all shareholders most importantly a zero write-off to all lenders,” Ambani said. According to the plan, the current debt of Rs 45,000 crore will be reduced through monetisation of assets, which include its telecom spectrum, towers, fibre, media convergence nodes and real estate in New Delhi, Chennai, Kolkata, Jigni and Tirupati. RCom expects to receive about Rs 25,000 crore from the sale of these assets, while it sees a reduction in debt of another Rs 10,000 crore from the commercial development of the Dhirubhai Ambani Knowledge City campus in Navi Mumbai. “All the asset monetisation proceeds will go for 100% prepayment and there is no other use of that at all,” Ambani said. The company indicated that it will receive equity infusion from global strategic partners for further debt reduction, the process for which is already under way and being conducted by Credit Suisse. The remaining debt, RCom said, will be close to Rs 6,000 crore. It expects to conclude the transactions by March 2018.
“How do you really manage over 35 different global and Indian banks to come on the same page? All in different time zones and different geographies, how do you make them really converge to one direction is what I call as a challenge,” he added. Asked about a pending insolvency petition with the Mumbai bench of the National Company Law Tribunal (NCLT), Ambani said, “When we speak about a full resolution, it is a full resolution. You cannot be in an NCLT petition and have a resolution. Nobody will do it; neither they nor us.” Ambani added that the banks were comfortable with the debt-reduction proposal that did not require them to convert debt into equity, as this saved them from going “through the pain in 20 other companies” where they have converted but found no buyers.
In October, RCom had said it presented lenders with a debt restructuring plan proposing conversion of Rs 7,000 crore of loans into a 51% stake in the telco. In June, the lenders had decided to convert a large portion of their loans to equity using the Reserve Bank of India’s SDR scheme, which allows banks to retain the present classification of the loan for seven months without worrying about it turning non-performing.
The RCom stock gained 30.78% following news of the resolution to end at Rs 21.33 on the BSE on Tuesday.