RCom begins to monetise real estate assets

Reliance Communications has begun to monetise its real estate assets, with the telecom operator selling off 150 residential flats at its Sea Woods complex in Navi Mumbai for about Rs330 crore. The company, which straddles both GSM and CDMA services, will use the proceeds to repay debt.

As of now, the company has a total debt of about Rs40,000 crore.

RCom has already received more than 50 per cent of the sale proceeds, and the balance will be realised during the current financial year and the remaining will come after the completion of documentation which is underway.

The company, controlled by billionaire Anil Ambani, also expects to announce plans shortly to monetise real estate measuring nearly four acres in New Delhi. This is the erstwhile Ranjit Hotel property, just off Connaught Place, RCom said in a statement, adding, the entire proceeds will be utilised for debt repayment.

RCom had embarked on a process to pare debt by monetising non-core assets.

On 4 December, RCom inked an agreement to sell its tower assets to private equity firms TPG and Tillman Global (See: RCom in non-binding pact with buyout firms to sell mobile tower business). Separately, the two PE firms are also evaluating RCom's nationwide inter- and intra-city optic fibre assets.

Together the transactions are expected to fetch about Rs30,000 crore.

Following its merger with Sistema Sham Telecom, SSTL will acquire and hold a 10-per cent stake in RCom. Prior to the transaction, SSTL plans to pay off existing debt (Sistema to merge Indian operations with Reliance Communications).

Following the completion of the transaction, RCom will assume responsibility for payment of SSTL's frequency spectrum licensing fees payable by instalments to the Department of Telecommunications (DoT) of India.

The Anil Ambani-owned firm also had plans to hive off its DTH business, offload stake in Reliance Globalcom (global operations) and a possible divestment in its tower unit Reliance Infratel among others.