Crippled Reliance Communications (RCom) announced yet another debt revival plan on Tuesday 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. Tuesday that the wireless division of the company, RComBSE 30.78 % will exit SDR mechanism and that it would reduce its debt by about Rs 25,000 crore through the sale of some of its spectrum, tower, and real estate assets.
Announcing the resolution plan, company chairman Anil Ambani told reporters that the new plan has the support of a Chinese lender that had dragged it to the NCLT for dues running into $1.8 billion, and would see RCom bringing down its mountain of debt by Rs. 25,000 crores.
RCom stock rallied 35 percent on the BSE to Rs. 22.01 percent after the announcement. The company has a debt of Rs. 44,000 crore.
Debt resolution involves RCom exiting SDR framework with no conversion of debt into equity and zero write-offs by lenders, Ambani said, adding he expects full closure by March 2018.
He said the deal involved an eight-stage asset monetization 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 proceeds from asset monetization 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.
On the no hair-cut for lenders, he said the new plan involves zero equity conversion for lenders and bondholders.
The debt resolution also involves the part transfer of spectrum installments, Ambani said.
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 monetization of the spectrum, tower, and fiber assets.