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Anil Ambani hands over majority stake in RCom to banks in new

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Press Trust of India Mumbai
Last Updated : Oct 30 2017 | 8:57 PM IST
With some of its deleveraging plans, which included a merger with Aircel, collapsing, cornered RCom today presented a fresh plan to recast its Rs 45,000 crore debt to lenders that includes converting Rs 7,000 crore of debt into equity by banks and handing over majority stake to them.
If the latest rescue attempt goes through, lenders led by SBI will hold at least 51 per cent in the telco and promoters' stake will be halved to around 26 per cent.
The debt revamp plan involves the Anil Ambani-run RCom raising money through asset sale to repay Rs 17,000 crore of debt, executive director Punit Garg said, adding though total value of the assets is over Rs 30,000 crore they are conservatively looking at raising only Rs 17,000 crore.
Of this, it will raise around Rs 10,000 crore through sale and commercial development of real estate assets, including its 100-acre headquarters, DAKC (Dhirubhai Ambani Knowledge Centre) in the nearby Navi Mumbai, he said.
The assets which would be put on block include its spectrum holding of 122 MHz valued at Rs 14,000 crore, towers business from where it can get Rs 7,000 crore, optical fibre network valued at Rs 3,000 crore and data centres which can fetch Rs 4,000 crore, Garg added.
The telco claimed that under the new plan there will be zero write-off for the lenders, who used to taking haircuts in stressed assets, and that this will make RCom a sustainable and profitable if the new restructure plans goes through.
Even though RCom has time till December 2018 under the strategic debt restructuring (SDR) agreement with the lenders, it is confident of getting through with the asset monetisation efforts by March 2018.

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The lenders have appointed SBI Caps to carry out the new monetisation plan.
Even under the ongoing SDR, banks would have any way taken majority ownership, but the collapse of a slew of deals including a planned merger with Aircel earlier this month, had raised doubts over its sustainability.
The merger with Aircel was the last straw of hope for the company, but did not go through due to a slew of litigations filed by many of its unpaid vendors like Ericsson among others and even individual shareholders.
At today's closing price, RCom is valued at over Rs 3,900 crore only. But when asked about the conversion of Rs 7,000 crore debt to equity, Garg said they assume an appreciation in the enterprise value once the new restructuring started.
He also said had the merger deal with Aircel happened the capital base would have expanded by 10 per cent.
Speaking about the outcome of the meeting, Garg said, "the lenders were very comfortable looking at the conservative management estimates".
When asked if it has received the lenders' nod, Garg said, "do you think lenders can refuse a zero write-off plan... they got to be so happy that they wanted it to be completed as of yesterday."
As part of the plan, the lenders will be left with Rs 6,000 crore of debt which Garg said will be sustainable.
He said the assets will be sold one by one transparently with the help of transaction advisors in a process overseen by lenders and RCom will not get into bilateral agreements for sales.
Asked whether Reliance Jio, with which it has ongoing pacts for sharing towers, fibre and spectrum, might be interested in these assets, Garg replied in the affirmative.
"As far as their (Jio) interest is concerned, I think at this moment they're very much interested in a lot of our assets. They've said very clearly that if it is a transparent process, which is run by lenders, they're happy to bid and pick up some assets from them," he said.
Earlier, RCom was looking to reduce its debt by over Rs 25,000 crore through a merger with Aircel and also selling its tower telecom mast business to Brookfield Infrastructure, which seems like going for a rebid as part of the plan presented today.
Meanwhile, Garg also confirmed that RCom is significantly reducing its presence in the 2G and 3G voice business to concentrate on the 4G services and also the enterprise business.
He, however, did not share the number of jobs that will be impacted because of this.

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First Published: Oct 30 2017 | 8:57 PM IST

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