MUMBAI: Crippled Reliance Communications (RCom) announced yet another debt revival plan today claiming full debt resolution by March but without involving any conversion of debt into equity and exiting the SDR framework, apart from coming on-board of a strategic investor.
But the company did not name the new investor.
Announcing the resolution plan, company chairman Anil Ambani said the company has achieved full resolution of Reliance Communications' (RCOM) debt reducing it by Rs 25,000 crore, to Rs 6,000 crore. He said, "We have achieved resolution that involves Reliance Communications exiting strategic debt recast. Clearly and truly this is a historical achievement for any group. RCOM debt will reduce by Rs 25,000 crore, The entire monetisation process to repay debt of lenders will be completed by January-March 2018 in a phased manner."
The company has a debt over Rs 44,000 crore.
RCom stock rallied 35 per cent on the BSE to Rs 22.01 per cent after the announcement.
He told reporters that the new plan has the support of a Chinese lender that had dragged it to the NCLT for dues running into USD 1.8 billion, and would see RCom bringing down its mountain of debt by Rs 25,000 crore.
Debt resolution involves RCom exiting SDR framework with no conversion of debt into equity and zero write-off by lenders, Ambani said, adding he expects full closure by March 2018.
The proceeds from asset monetisation will be used only to pay back the lenders, including China Development Bank with whom the company sealed an out-of court settlement last evening in Beijing.
He said the deal involved an eight-stage asset monetisation process under an oversight committee headed by former RBI deputy governor S S Mundra with members from Trai and the whole process will be completed in 40 days flat. The debt resolution also involves part transfer of spectrum installments , Ambani said.
On the no hair-cut for lenders, he said the new plan involves zero equity conversion for lenders and bond holders.
It can be noted that 31 lenders led by SBI had met over the weekend.
Late last month RCom had presented what it called a 'no-loan write-off' plan where lenders are to convert Rs 7,000 crore of debt into equity.
The 'no-loan write-off' plan also involves repaying of up to Rs 17,000 crore loans out of proceeds from monetisation of spectrum, tower and fibre assets.
Saying that going forward Reliance Communications will be a business-to-business (B2B) company, he added the company achieved this debt restructuring by asset monetisation and selling real estate".
"The new company will have a debt of Rs 6,000 crore," he said.
The reduction would allow RCOM to provide "zero write-offs to all lenders and bondholders."
"There will be no conversion of debt to equity as well," Ambani said.
He said the company had faced a lot of headwinds in the last few months with respect to National Company Law Tribuna".
"It was challenge...how do you really manage 35 global and Indian banks to come on the same page?" Ambani said.
He said for the new RCOM 50 per cent of revenue will come from outside India.
"Reliance Communications will be now one of the strongest entreprise business of India," Ambani added.
(With IANS inputs)