Chairman of Reliance Group Anil D. Ambani has voluntarily decided to draw no salary or commission from Reliance Communications in the current financial year.
“Decision is part of company promoters’ commitment to Strategic Transformation Program. RCom management also steps up, follows Chairman’s lead to ensure time-bound execution,” said a press statement.
“RCom management team on-board has also decided to defer personal pay by up to 21 days. Measures will remain in place till December 2017,’ the statement added.
The move comes amid a major exercise by the company to cut down its overall debt after an agreement with lenders allowed RCom time till December 2017 to undertake asset sale.
The debt-laden company has assured the lenders that it would move swiftly on the tower asset sale and merger with Aircel.
Several credit-rating agencies, including Fitch, had downgraded RCom’s debt rating on concerns that the company would default on loan repayment. The company’s share price was punished by investors as questions were being raised about mounting debt of nearly ₹45,000 crore.
The company is looking to repay 60 per cent of the debt through two transactions. It will first merge its wireless business with Aircel to create a new company called AirCom. RCom will hold 50 per cent in the new venture and transfer ₹14,000 crore debt into this company.
In addition, RCom is selling its tower businesses to Brookfield. Ambani said both these transactions will be completed by September. RCom will also look at a strategic stake sale of its global business, GCX, to further reduce debt.
In the event the transactions are not completed in the above time-frame, the lenders may exercise their right to convert their debt in accordance with the applicable SDR (Strategic Debt Restructuring) norm.