Reliance Communication on Tuesday announced a new asset monetisation plan and its exit from SDR framework. Anil Ambani-led RCom will reduce debt by about Rs 25,000 crore through the sale of some of its spectrum, tower and real estate assets.
Debt resolution involves RCom exiting SDR framework with no conversion of debt into equity and zero write-off by lenders and bond holders, Ambani said, adding he expects full closure by March 2018.
Under the new debt revival plan, upon completion of all transactions, the balance debt in RCom is expected to be - Rs 6,000 crore, a reduction of over 85 per cent of total debt, RCom said in a release.
He said the deal involved an eight-stage asset monetisation process under an oversight committee headed by former RBI deputy governor S S Mundra with members from Trai and the whole process will be completed in 40 days flat.
The proceeds from asset monetisation will be used only to pay back the lenders, including China Development Bank with whom the company sealed an out-of court settlement last evening in Beijing.
On the no hair-cut for lenders, he said the new plan involves zero equity conversion for lenders and bond holders. The debt resolution also involves part transfer of spectrum installments, Ambani said.
The monetization process is being carried out under the oversight of an independent high powered Bid Evaluation Committee. Lenders have received the final binding bids and all transactions are expected to be closed in a phased manner between January and March 2018, RCom said.
Announcing the resolution plan, company chairman Anil Ambani told reporters that the new plan has the support of a Chinese lender that had dragged it to the NCLT for dues running into $1.8 billion, and would see RCom bringing down its mountain of debt by Rs 25,000 crore.
"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," 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.
RCom stock rallied 35 per cent on the BSE to Rs 22.01 per cent after the announcement. The company has a debt over Rs 44,000 crore.It can be noted that 31 lenders led by SBI had met over the weekend. Late last month RCom had presented what it called a 'no-loan write-off' plan where lenders are to convert Rs 7,000 crore of debt into equity. The 'no-loan write-off' plan also involves repaying of up to Rs 17,000 crore loans out of proceeds from monetisation of spectrum, tower and fibre assets.