Beleaguered cellco Reliance Communication (RCOM) has presented a new ‘zero write-off’ plan to its lenders, under which the creditors would convert around INR70 billion (USD1.08 billion) of the company’s INR450 billion debt into equity, taking a majority 51% stake in the operator. The Economic Times writes that the company could then raise funds by selling its towers and spectrum and monetising its real estate assets. Executive director Punit Garg was quoted as saying that the telco could raise around INR170 billion through the sale of its tower, fibre and spectrum assets, adding that Reliance Jio Infocomm (Jio) was a likely buyer: ‘As far as interest is concerned, I think at this moment that they are very much interested in a lot of our assets. They have said very clearly, if it is run by lenders, they are happy to bid and pick up some assets from them.’
If accepted, the deal would see RCOM’s promoters reduce their stake in the firm from around 65% to roughly 25%, with the join lenders forums (JLF) then left to decide on the future management structure of the company. The proposal would see RCOM exit the wireless market, but the telco would continue to operate a ‘non-mobile B2B business’ covering its internet data centres, global submarine cable network and its global and Indian enterprise services.
In a statement to the Bombay Stock Exchange (BSE), RCOM noted that its saleable wireless assets include spectrum in the 800MHz, 900MHz, 1800MHz and 2100MHz bands, a portfolio of more than 43,000 towers, and in excess of 178,000 route km of intercity and intra-city fibre infrastructure.