In a bid to assuage lenders and investors, Reliance Communications (RCom) on Monday said that it will reduce its debt by ₹25,000 crore before September 30.
The company said that it will close its ongoing process for merging its mobile business with Aircel and the sale of tower assets to Brookfield in the next four months. These deals will help the beleaguered telecom firm to bring down its debt substantially from ₹36,726 crore, as of March 31.
Shares plungeOn Monday, the telecom operator’s shares ended down 20 per cent on the BSE on fears of default on loan repayment by the company and fourth-quarter losses. RCom’s losses have widened to ₹966 crore in the quarter ended March against ₹531 crore in the October-December quarter.
“After the completion of the Aircel merger and sale of our tower business, RCom’s debt will stand reduced by about ₹25,000 crore. While we will also have a 50 per cent strategic stake in the joint venture with Aircel, we will also have a 49 per cent future economic upside in the towers business. “This will provide future monetisation opportunities for significant further deleveraging,” Gurdeep Singh, RCom Co-CEO and Chief Executive Officer of its Consumer Business, told
RCom had launched programme for strategic transformation in 2015, which is now at the final stages of completion. This includes a merger with Sistema’s Indian mobile business, spectrum trading and sharing deal with Reliance Jio Infocomm, consolidation of RCom’s wireless business with Aircel and monetisation of tower assets. However, the deals with Aircel and Brookfield has got delayed due to procedural hurdles.
“We are currently in discussions with our lenders to obtain their consents for the two transactions and to refinance scheduled instalments falling due in the interim period up to September 30, to facilitate expeditious closing of both transactions,” Singh added.