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Update: RCOM’s lenders now have rights to convert debt into equity

Update (June 5th, 2017): RCOM has confirmed in a statement that its lenders have decided to initiate Strategic Debt Restructuring (SDR) process and had given the company time till December 2017 for repayment of all outstanding debt. The telco said that it plans to pay out Rs 25,000 crore in debt to its lenders by that time, bringing down its overall debt by 60%. 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. A consortium of 22 lenders of Anil Ambani led Reliance Communications (RCOM) have decided to initiate Strategic Debt Restructuring (SDR) process, which allow lenders to convert their outstanding debt payment from RCOM into equity shares, according to this Bloomberg Quint report. The lenders met on Friday to hasten up RCOM’s outstanding debt payment of Rs 25,000 crore. RCOM said in a statement this week that it will honor the outstanding payments by September 30th  after its two business deals—Aircel merger and Brookfield tower sale—gets completed. The company’s net debt stood at Rs 44,345.3 crore as of Q4FY17, which is an increase of 3.4% when compared to Rs 42,802.5 crore debt in Q4FY1 SDR is a debt recovery method offered by the RBI, which allow bankers to convert parts of their loan into equity shares of at least 51%. This gives operation control to bankers, which gives them an option of selling the majority shares to a suitable buyer. However, as per the report, the lenders…

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