Debt-laden Reliance Communications' strategic restructuring plans have been accepted by lenders and it has been given time till December 2017 to conclude the deals, chairman Anil Ambani said on Friday.
The chairman of the Reliance ADAG Group made a rare media appearance, after shares of Reliance Communications were hammered this week amid mounting losses and ratings agencies downgraded the company.
Reliance Communications had, last year, announced plans to merge its wireless business into a separate company with Aircel. The new company will be called Aircom, in which RCom will hold 50 per cent stake. The company has got regulatory and shareholder approval for the deal and it is now working with lenders to get the deal approved, Ambani told reporters.
Separately, in December last year, RCom also sold 51 per cent of its telecom tower business to Canadian fund manager Brookfield Infrastructure for Rs 11,000 crore. Apart from upfront cash, RCom retained 49 per cent in the company.
Both these deals are expected to reduce the company's debt to Rs 20,000 crore from the existing around Rs 45,000 crore.
“Lenders have given time till December 2017 to complete the transactions. But we hope to close the deal way before by September,” Ambani said.
The company was also looking to sell its DTH (direct-to-home satellite TV) business and may also sell lucrative real estate in Delhi and Navi Mumbai, to pare down debt further, he added.
RCom has tried to sell its DTH business earlier too. Reports in 2012 had said Sun TV had evinced interest in acquiring it, but later backed out.
Ambani said the company was in a “unique position” to build long-term shareholder value and would look to maintain a “conservative” debt profile post restructuring.
On Thursday, Fitch Ratings also downgraded RCom's debt ratings to 'CCC' from 'B+'.
“RCom's ratings downgrade reflects Fitch's belief that some kind of default is a real possibility,” it had said.
Earlier, Moody's Investors Services had also downgraded RCom's bond rating and corporate family rating, citing weak operating performance and high leverage.
For the 2016-17 financial, RCom posted a net loss of Rs 1,403 crore versus a profit of Rs 639 crore a year ago, while revenue declined 11 per cent to Rs 19,949 crore.
Ambani said he was “disappointed” with the ratings agencies downgrade and added that the company was engaged with the ratings agencies.
RCom's shares have slumped 16 per cent this week. Over the last one month, the stock value has fallen over a third. On Friday, RCom closed at Rs 20.65 on the BSE, down 0.5 per cent.
