Reliance Communication surges 12% after offering debt resolution plan: 31 Oct 2017

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Reliance Communication surged 12% at around 10 AM today after the debt-laden company presented a new plan to the banks, offering a controlling stake in the company after its earlier merger proposal fell flat.

According to an official release, RCom 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 company has offered to convert debt of Rs 7,000 crore into 51% 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.

Reliance Communication is under a standstill period (for interest and principal repayments) till December 2018 and expects to complete the SDR process as per applicable RBI guidelines.

Reliance Communications Ltd is currently trading at Rs 17.6, up by Rs 1.9 or 12.1% from its previous closing of Rs 15.7 on the BSE. The scrip opened at Rs 16.6 and has touched a high and low of Rs 18.2 and Rs 16.5 respectively.

Reliance Communication (RCOM) is a diversified telecom service provider offering wireless, wireline and DTH services. It is a dual technology (GSM + CDMA), wireless player. It has RMS of 5% and subscriber base of 10.3 crore as on 31st March 2016.

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