- RCOM MAKES COMPREHENSIVE DEBT RESOLUTION PROPOSAL TO ITS DOMESTIC AND INTERNATIONAL LENDERS
- RCOM TO REPAY DEBT OF UP TO RS. 17,000 CRORE THROUGH ASSET MONETISATION
- ASSET VALUE BASED ON INDEPENDENT THIRD-PARTY VALUATION ESTIMATES
- TRANSPARENT AND COMPETITIVE PROCESS FOR MONETIZATION OF: WIRELESS SPECTRUM AND RELATED ASSETS TOWER, FIBER AND MCN (MULTI-CONVERGENCE NODES) ASSETS
- RCOM TO REPAY ADDITIONAL DEBT OF RS. 10,000 CRORE THROUGH SALES AND COMMERCIAL DEVELOPMENT OF REAL ESTATE ASSETS
- REAL ESTATE COMPRISES DAKC (125 ACRE) AND OTHER PRIME REAL ESTATE ASSETS ACROSS 8 METROS
- EQUITY CONVERSION OF RS. 7,000 CR OF DEBT PROPOSED IN NEW RCOM IN COMPLIANCE OF RBI SDR GUIDELINES
- NEW RCOM BUSINESS WILL HOLD PROFITABLE, NON-MOBILE, B2B BUSINESS: GLOBAL AND INDIAN ENTERPRISE INTERNET DATA CENTRES (IDC) GLOBAL SUBMARINE CABLE NETWORK
- SUSTAINABLE AND CONSERVATIVE LEVEL OF DEBT OF ONLY RS. 6,000 CR PROPOSED FOR NEW RCOM
- PROPOSAL TO BE IMPLEMENTED WITHIN STANDSTILL PERIOD (FOR INTEREST AND PRINCIPAL REPAYMENTS) TILL DECEMBER 2018 AS PER RBI SDR GUIDELINES
Mumbai, October 30, 2017: Reliance Communications Limited (RCOM) today made a comprehensive debt resolution plan to its domestic and foreign Lenders.
Comprehensive Debt Resolution Plan
RCom’s debt resolution plan envisages no loan write-off by the lenders. RCom will pay off up to Rs. 17,000 crore of its debt, out of the proceeds of monetization of Spectrum, Towers and Fiber and MCN (Media Convergence Nodes) assets. RCom will pay additional Rs. 10,000 Crore of its debt, out of the proceeds of sales and commercial development of DAKC and other prime real estate assets across 8-metros. The New RCom will have sustainable and profitable B2B – non mobile business.
Monetization Process
RCom is working closely with SBI Capital Markets Limited, the advisors appointed by the Lenders, to run a competitive process in a transparent manner to monetize the Spectrum, Tower and Fiber, MCNs and prime real estate assets.
The Company has valuable spectrum across 800/900/1800/2100 MHz spectrum bands ideally suited for 4G and other evolving technologies. While the Company will continue with its 4G focused strategy, it plans to monetize its holding through trading and sharing arrangements.
The Company will also monetize its extensive Tower and Fiber portfolio comprising of 43,000 plus towers and over 1,78,000 Route KM of Intercity and Intracity Fiber. RCom’s monetization plan also includes its 248 MCN properties located across the country and prime real estate assets located at New Delhi, Mumbai, Chennai, Hyderabad, Kolkata etc.
Conversion of debt
Debt of Rs. 7,000 crore is proposed to be converted into 51% of the Company’s equity, as per the SDR guidelines of the Reserve Bank of India. Shareholders of the Company at the Annual General Meeting held on September 26, 2017 have already approved issuance of equity shares to lenders by conversion of loans.
New RCom
RCom’s transformation journey is focused on viable, sustainable and profitable B2B businesses with a strong domestic and global footprint. RCom’s B2B business portfolio comprises Enterprise, Carrier, Internet Data Centre and global submarine cable network in India and overseas across continents. New RCom will rank among the Top 3 data players in India.
These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst low competitive intensity. These businesses have no exposure to mobility and consumer business including fiber to home. They generate equal revenues from domestic and overseas operations.
The New RCom will have sustainable and conservative level of debt of only Rs. 6,000 crore. Cost of debt will be lower due to ability to raise debt funds overseas at low cost.
Standstill period till December 2018
RCom is under a standstill period (for interest and principal repayments) till December 2018 and expects to complete the SDR process as per applicable RBI guidelines.
