Miracle man

28 December 2017 By Clara Ferreira Marques

Anil Ambani says he has rescued his Reliance Communications with a $6 bln firesale. That’s a relief for lenders, assuming buyers turn up as promised. But it’s not the moral victory the tycoon claims. Even if creditors play ball, investors are left with a much diminished company.

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Reliance Communications (RCom) on Dec. 26 announced a plan to sell wireless assets, real estate and equity in order to repay 85 percent of its debt.

RCom, led by Indian billionaire Anil Ambani, said it would not swap debt for equity or force lenders and bondholders to take a haircut.

RCom plans to sell assets including mobile communications spectrum, telecom towers and fibre to raise 250 billion rupees ($3.9 billion). It said it had already received expressions of interest and 15 non-binding offers, though it did not provide details.

The company will transfer debt worth 100 billion rupees to a special purpose vehicle that will develop real estate assets in Mumbai.

It also plans to sell a stake in the residual business, which will serve corporate clients with undersea cables and internet data centres.

At the end of the process, the group says its debt will be reduced to 60 billion rupees. It expects asset sales to close by March 2018.

Context News

Reliance Communications (RCom) on Dec. 26 announced a plan to sell wireless assets, real estate and equity in order to repay 85 percent of its debt.

RCom, led by Indian billionaire Anil Ambani, said it would not swap debt for equity or force lenders and bondholders to take a haircut.

The company will transfer debt worth 100 billion rupees to a special purpose vehicle that will develop real estate assets in Mumbai.

It also plans to sell a stake in the residual business, which will serve corporate clients with undersea cables and internet data centres.

At the end of the process, the group says its debt will be reduced to 60 billion rupees. It expects asset sales to close by March 2018.

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