Reliance Communications bondholders hire advisers after company defaults on its dollar-denominated notes

By: |
Updated: December 20, 2017 12:53:41 PM

Bondholders of Reliance Communications Ltd., the embattled Indian mobile phone operator controlled by billionaire Anil Ambani, have hired advisers after the company defaulted on its dollar-denominated notes last month.

reliance bondholders, bondholders hire advisers, reliance bondholders in confusion, trouble for reliance shareholdersThe outstanding amount of the securities is only 0 million compared with the company’s total debt, which was about billion as of the end of March. (Reuters)

Bondholders of Reliance Communications Ltd., the embattled Indian mobile phone operator controlled by billionaire Anil Ambani, have hired advisers after the company defaulted on its dollar-denominated notes last month. Certain investors holding a significant percentage of the securities have formed a committee, which has appointed PJT Partners Inc. as its financial adviser and Kirkland & Ellis LLP as its legal adviser, according to a document seen by Bloomberg News. The group has commenced discussions with the company, it said. Reliance Communications marked the highest-profile default on international debt by an Indian borrower since the nation’s insolvency and bankruptcy code was passed in May 2016, when it failed to pay interest on the dollar bonds last month. The company’s earnings slumped after deep-pocketed Reliance Jio Infocomm Ltd., backed by India’s richest man and Ambani’s older brother, started offering free calls last year.

Reliance Communications’ dollar note investors hold only a small portion of the company’s overall debt, so “it’s unclear what their negotiating power is,” said Pavitra Sudhindran, a credit analyst at Nomura Holdings Inc. The outstanding amount of the securities is only $300 million compared with the company’s total debt, which was about $7 billion as of the end of March, according to data compiled by Bloomberg.

Creditors have been circling. China Development Bank asked an Indian tribunal to place the mobile phone operator under insolvency proceedings, a person familiar with the matter said in November. Public-relations firm Fortuna Public Relations Pvt. made a similar request earlier this month. Reliance Communications has said that a standstill period for interest and principal repayments continues until December 2018.

In a call with bondholders in November, the company encouraged noteholders to form a committee. “The committee and its advisers would like to engage with other noteholders to understand their positions and perspectives,” the document seen by Bloomberg News said.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1HDFC to raise Rs 13,000 cr, invest up to Rs 8,500 cr in banking arm
2Markets hit fresh closing highs, auto stocks rally
3Removal of inventory limits boosts sugar stocks