Anil Ambani, chairman of Reliance Group, looks on while attending the opening ceremony of the Aero India air show at Air Force Station Yelahanka in Bengaluru, India. (Photographer: Kuni Takahashi/Bloomberg)

Anil Ambani’s RCom Unveils Asset Sale Plan To Repay Lenders

Reliance Communications Ltd. presented its domestic and international lenders a new “zero loan write-off plan” to repay its Rs 45,733 crore debt after its failed merger with Aircel.

The Anil Ambani-led firm unveiled the plan today in Mumbai that pivots on selling the telecom operator's network infrastructure and real estate assets and converting some debt into equity.

The company aims to repay Rs 17,000 crore of debt from asset monetisation, and Rs 10,000 crore from the sale and commercial development of real estate, Punit Garg, executive director of RCom, said in a media conference. The lenders will get to convert Rs 7,100 crore of debt into equity and, after the turnaround, RCom will have Rs 6,000 crore debt, he said.

RCom has been struggling to repay loans amid hyper competition and skimming tariffs in the telecom industry. Its lenders had invoked Strategic Debt Restructuring in June, giving the operator a seven-month moratorium. RCom was banking on a merger with Aircel, which was part of its effort to reduce debt by more than half. The merger failed due to “legal and regulatory uncertainties, and various interventions by vested interests”.

RCom had then said it would pare debt through sale of assets. It has spectrum across 800, 900, 1,800 and 2,100 megahertz bands, valued at over Rs 19,000 crore, based on last auction pricing. The telecom operator is also looking to sell its tower assets and its land bank in Navi Mumbai and Delhi, valued at more than Rs 10,000 crore. It appointed investment management company JLL as an adviser.

Last week, RCom also shut down its unsustainable 2G wireless business losing nearly 4 crore customers.

Garg said that the “new” RCom after paring debt will be a “non-mobile” enterprise business with "sustainable and conservative level" of debt. Around half of RCom’s revenue is expected to come from its overseas operations, according to the media presentation. The company also expects to be among top three enterprise players in India.

Shares of RCom closed 1.6 percent lower on Monday, ahead of the announcement, compared to a 0.3 percent rise in the benchmark S&P BSE Sensex.