RCom to reduce debt By Rs 25,000 Cr From Asset Sale, Exit From RBI SDR Framework

Anil Ambani’s RCom Thursday said it is hopeful to reduce its existing debt by Rs 25,000 crore from its planned asset sale making the total debt reduction by 85%. The company has put up all its assets that includes spectrum, real estate, tower etc for sale and the company had received enough interests from multiple suitors including Reliance Jio.

This reduction of debt, the company claims, is fastest in the industry and was done in just 40 days, a record.

RCom also said the debt reduction will also help it exit from RBI’s strategic debt resolution SDR) framework. All this will happen, the company said, without any or ‘zero’ write-offs to lenders and bondholders, as well as without any conversion of debt to equity.

Ambani who was addressing a news conference this morning also said that his company will pay off the debts in a phased manner between January 2018 to March 2018.

“RCom will receive equity infusion from global strategic partners for further debt reduction, consequent upon a stake sale process already underway, and being conducted by Credit Suisse. RCOM’s balance debt is expected to be a highly conservative ~ Rs. 6,000 crore only, upon completion of all transactions,” the company added.

The assets that are up for sale include 122.4 MHz of 4G spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers across the country, 1,78,000 route KM of optic fibre network and 248 media convergence nodes that offer a coverage of 5 million sq ft. Besides these telecom infrastructure, the company is also selling off its real estate properties in New Delhi, Chennai, Kolkata, Jigni and Tirupati.

RCom has recently closed its wireless business that includes its mobile services. It has then announced to focus on the company’s B2B business. The company said RCOM’s continuing operations will comprise stable and profitable B2B focused businesses, including Indian and Global Enterprise, Internet Data Centres and the largest private submarine cable network in the world. These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst relatively low competitive intensity.

Leave a Reply

%d bloggers like this: