RCom Offers Recuction plan to lenders

Reliance Communications (RCom) brings a debt reduction plan to lenders, which includes sale of real estate, under-sea cable assets and its DTH business.  RCom is looking to raise about Rs 11,000 crore by monetizing key properties in Mumbai and Delhi. It is also believed to have sounded out Hong Kong-based Citic Telecom International for sale of its undersea cable assets - housed under Global Cloud Xchange. Citic had also looked at the asset back in 2014 but that deal didn't materialize.

The struggling telco met bankers late last week to chalk out the way ahead and update them with the latest on their planned merger with Aircel and the sale of tower business to Canada's Brookfield, both of which combined is expected to lower its nearly Rs 45,000 crore debt by 60% by September.

"The aim is to retire around 80% of the debt by December," one of the people said. Next meeting of the lenders will be held after the scheduled July 27 hearing at the National Company Law Tribunal (NCLT) on the Aircel deal.

Both the RCom deals - merger of its wireless business with Aircel and sale of towers to Brookfield - are in the NCLT for approval. The previous meeting of the NCLT last week reportedly saw some of RCom's creditors, including lender China Development Bank -with an exposure of nearly Rs 9,000 crore — and equipment vendor Ericsson India point out that they aren't being kept in the loop on the deals. Sweden's Ericsson said RCom owed it some Rs 1,000 crore.

The JLF was formed last month by banks to prevent the RCom account from turning into a non-performing asset (NPA). It had decided to invoke a strategic debt restructuring (SDR) scheme on RCom after rating agencies downgraded the company citing its default on the principal and interest of some non-convertible debentures.