Lenders have given us time till December, says RCom’s Anil Ambani
- Lenders will not covert debt into equity till December.
- Open to selling strategic sale in global operations
- Committed to restore credit ratings
Currently battling losses and credit rating downgrades, Reliance Communications’ (Rcom) chief Anil Ambani tried to calm investors’ nerves in Mumbai after a joint lender forum was constituted.
Ambani, addressing a press conference, said that the Rcom presented its debt payment plan to its lenders who approved it given the company time till December 2017 to pay the loans due.
Ambani said that lenders will not convert debt into equity till December, 2017.
RCom has over Rs 44,000 crore in debt and reported a net loss of Rs 948 crore in the fourth quarter ended March 31, 2017.
The company is merging its business with Aircel and will be renamed Aircom post the merger. RCom is also in talks with Brookfield Infrastructure to sell part of its business. Ambani said that Brookfield is fully committed to complete the tower deal within the given timeline.
Ambani assured that both the deals will be completed by September 30, 2017 and the Rs 25,000 crore proceeds will be used to pay lenders.
Ambani said that this will take care of 60% of the total debt while the company will continue to make efforts to deleverage its balance sheet by looking at ‘strategic’ sale for its global business.
The company has retail operations in 14 countries including Australia, Canada, France and Hong Kong, among others.
Ambani also expressed his displeasure at the recent downgrades by four rating agencies and said that it is working to restore its credit profiles at the earliest.
He said that the company is in a unique position to create shareholders value. Amabani said that to do this, Rcom may look to sell Aircom stake in future.
He also said that the company may look to sell 49% stake in tower business in three years’ time.
Rcom’s India business CEO Punit Garg said that the telecom sector is seeking moratorium for spectrum payments.
He said that the competition in the sector is intense with data prices crashing to Rs 3 per GB from Rs 250 per GB in a short span.
He said that revenues of the telecom companies are falling sharply and last years have seen 10,000 jobs cut in the sector. The number is likely to grow to 30,000-40,000 in 2017, Garg warned.
Debt, at Rs 2.8 lakh crore, is a major issue plaguing the telecom sector with the finance ministry also taking a view on the same.