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RCom debt resolution plan: Lenders to take 51% stake
Debt of Rs. 7,000 crore is proposed to be converted into 51 percent of the Company’s equity, as per the SDR guidelines of the Reserve Bank of India.
Anil Ambani owned Reliance Communications has come up with the new strategy for its debt. The company has made comprehensive debt resolution plan to its domestic and foreign lenders.
Under this plan, the company will pay off up to Rs. 17,000 crore of its debt, out of the proceeds of monetization of Spectrum, Towers, and Fiber and MCN (Media Convergence Nodes) assets. RCom will pay additional Rs. 10,000 Crore of its debt, out of the proceeds of sales and commercial development of DAKC and other prime real estate assets across 8-metros.
The new RCom will have sustainable and profitable B2B - nonmobile business portfolio comprises.
The new RCom will have the sustainable and conservative level of debt of only Rs 6,000 crore. Cost of debt will be lower due to an ability to raise debt funds overseas at low cost. "RCom is under a standstill period (for interest and principal repayments) until December 2018 and expects to complete the SDR process as per applicable RBI guidelines," it said.
Debt of Rs. 7,000 crore is proposed to be converted into 51 percent of the Company's equity, as per the SDR guidelines of the Reserve Bank of India.
Shareholders of the Company at the Annual General Meeting held on September 26, 2017, have already approved the issuance of equity shares to lenders by conversion of loans.
The Company has valuable spectrum across 800/900/1800/2100 MHz spectrum bands ideally suited for 4G and other evolving technologies. While the Company will continue
with its 4G focused strategy, it plans to monetize its holding through trading and sharing arrangements.
The Company will also monetize its extensive Tower and Fiber portfolio comprising of 43,000 plus towers and over 1,78,000 Route KM of Intercity and Intracity Fiber. RCom's monetization plan also includes its 248 MCN properties located across the country and prime real estate assets located in New Delhi, Mumbai, Chennai, Hyderabad, Kolkata etc.