Last month, China Development Bank moved to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy (IBC), which Reliance Communications termed as “premature action”, but it seems trouble for Anil Ambani’s debt-ridden company is far from over as it is being reported that two more Chinese lenders are in support of insolvency proceedings.
Reuters on Tuesday reported quoting three unnamed people that two major Chinese lenders plan to support a move by China Development Bank to put RCom into insolvency court as they seek to recover about Rs 9,000 crore in debt. Industrial and Commercial Bank of China (ICBC), the country’s biggest-listed lender by assets, and Export-Import Bank of China plan to back CDB, Reuters reported.
The Anil Ambani-owned company has a debt of Rs 9,000 crore from the China Development Bank. The company was also dragged by Ericsson India to NCLT for unpaid dues of nearly Rs 1, 150 crore. RCom is reeling under a total debt of Rs 45,000 crore. Of this, Rs 25,000 crore is domestic debt and remaining Rs 20,000 crore is in the form of foreign loans and bonds. RCom classified Rs 22,550 crore of borrowings as non-current liabilities.
n June this year, RCom got a seven-month breather from its lenders as part of a strategic debt restructuring (SDR) scheme. RCom said it would repay its Rs 25,000 crore debt from two merger deals with Aircel and Brookfield of Rs 14,000 crore and Rs 11,000 crore respectively, which Bloomberg called “summer sale”.
As the December deadline is close by, the company has announced plans to repay its debt — converting Rs 7,000 crore debt into 51% equity and handing over to banks as the new plan after its merger deal with both Aircel and Brookfield collapsed. The company claimed that under the new plan there will be zero write-off for the lenders. As on Monday, RCom’s market valuation stood at Rs 3,900 crore only.
RCom said the company will be raising another Rs 17,000 crore to repay the debt through the asset sale. Of this, the company will raise around Rs 10,000 crore through the sale and commercial development of real estate assets.