RCom's new debt repayment plan gives banks 51% shareholding

Anil Ambani-led Reliance Communications (RCom) will retain 49 per cent equity and a debt of Rs6,000 crore after the completion of the new debt repayment plan.

Anil Ambani  

Under the Reserve Bank of India mandated restructuring plan, promoters' stake will come down to 26 per cent

RCom presented a fresh debt repayment plan to its creditors on Monday which envisages raising Rs27,000 crore through sale of assets and lenders converting Rs7,000 crore of loans into equity, giving them majority 51 per cent stake.

RCom, which has a debt of Rs45,000 crore, proposes to repay up to Rs17,000 crore through monetisation of assets and another Rs10,000 crore through sale and development of real estate space.

In the process the company will be selling some of its assets to the Mukesh Ambani-backed Reliance Jio. RCom will be selling part of its spectrum, fiber and tower assets which are likely to fetch about Rs17,000 crore.

RCom has an extensive tower and fibre portfolio comprising more than 43,000 towers and over 1.78 lakh route km fibre. Besides, the company has 248 data centre properties.

Apart from spectrum and other telecom asset sales, RCom is planning to raise an additional Rs10,000 crore through its properties in Dhirubhai Ambani Knowledge City in Navi Mumbai and Delhi among others.

While details of the asset sale plan are not available, the latest proposal will be a 'Zero Loan Write-Off Plan', where lenders will not have to take haircuts.

RCom last week announced plans to shut down its 2G services in about a month and continue to operate only 3G and 4G services.

As per the plan submitted to the joint lending forum, creditors will handle asset sales transactions and Rcom will not strike any 'bilateral' deals.

''A transparent process has been put in process and the lenders have sent the proposals to about 26-27 companies; it is believed they have got responses from a large number of firms. The joint lenders forum is in the final process of short-listing,'' Punit Garg, executive director at RCom, said.

''There will not be any bilateral dealings anymore. The lenders will decide the best deal available from now on,'' said Garg, adding, that RCom ''was not interested in bilateral dealings and wanted the process to be transparent.''

The lenders have hired SBI Capital Markets as the adviser for the asset sales, he added.

Garg said the firm expects to complete the debt reduction plan by March 2018. ''None of these transactions require regulatory clearances and will be easy to execute.''