Anil Ambani-led Reliance Communications confirmed in a clarification to BSE that it has put up land assets for sale in order to clear off its mounting debt. Apart from this, RCOM has plans to hive off its DTH business unit and other methods like monetization of tower units, and its 50% stake in Aircel to repay debt.
In the notification to BSE, RCOM said that it is considering sale/lease of 318,000 sq ft Reliance Centre office in New Delhi and a 600,000 sq ft DAKC- World Class IT park in Navi Mumbai. As per an Economic Times report, the asset sale will help RCOM reduce debt by Rs 11,000 crore out of the current outstanding amount of Rs 45,000 crore. The sole intention of these land sale is to cut debt, the publication said citing unnamed RCOM officials.
RCOM’s lenders initiate process to convert debt into equity
The telco’s plans to sell off its land assets also comes at a time when its lenders have decided to initiate Strategic Debt Restructuring (SDR) process, giving the company time until December 2017 for repayment of all outstanding debt. The telco said that it plans to pay out Rs 25,000 crore in debt (out of the total Rs 45,000 crore) to its lenders by December. If the company fails to make the payment by December, lenders will have the right to convert a part of the debt into equity shares.
RCOM plans to raise Rs 25,000 crore from two transactions to reduce debt: a) merger with Aircel’s wireless business unit which was signed in September last year will help the company reduce debt by Rs 14,000 crore, b) while its tower sale deal with asset management company Brookfield will contribute the remaining Rs 11,000 crore. With the asset sale in process, the company will possibly able to pay out 80% of the outstanding debt amount.
RCOM asks govt for special rebates: Meanwhile, RCOM has also requested the government to discount levies like license fee, taxes, spectrum usage charges and other deferred payment owed to the government by telcos, to ease the financial stress on service providers. It also urged the government to do away with interconnect usage charges, stating that unlimited calling tariffs leads to more IUC payouts and not necessarily the same amount of return.