RCom Gets Relief From Dollar Bondholders as Deadline Looms
(Bloomberg) -- Reliance Communications Ltd., the embattled Indian mobile operator headed by billionaire Anil Ambani, clinched the approval of overseas bondholders to ease its debt burden, putting the company a step closer to averting bankruptcy.
RCom, which defaulted last year on its $300-million bond, got 83 percent of the noteholders to approve the plan in London, the company said in an exchange filing. Bondholders will receive $118 million in cash and $55 million in bonds to be issued by its unit Global Cloud Xchange, the filing said.
The vote was crucial for Ambani because settling the matter was a precondition for RCom to reorganize its larger local debt. The company has been working against the clock to reach agreements with all its creditors by Aug. 27, a deadline from the country’s central bank for firms with delinquent accounts and under other conditions, or face insolvency proceedings.
“There aren’t many options left with RCom’s investors,” said Raj Kothari, London-based head of trading at Jay Capital Ltd. “It’s still a good deal when we see the problems in India’s telecom industry and RCom in particular.”
RCom’s dollar bonds were little changed at about 38 cents on the dollar at 6:00 p.m. in Hong Kong, according to Bloomberg-compiled prices.
The carrier is also in the midst of completing its sale of airwaves, towers and fiber to a rival controlled by Ambani’s older brother, who’s India’s richest man. The brothers wrapped up a smaller deal involving transmission nodes, worth 20 billion rupees, on Aug. 23.
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