i think link has some problem - here are the details .
Live Mint Article Dated Oct 30, 2017
• Rs. 27,000 Cr will be raised through sale of assets and lenders converting a portion of their loans into equity, giving them majority control.
• Firm has about Rs. 45,000 Cr in debt and announced to shut down 2G services.
• Firm will continue to operate 3G and 4G services till the time they remain profitable.
• According to the new plan, which is yet to be approved by banks, RCom will sell part of its spectrum, fiber and tower assets which are likely to fetch about Rs 17,000 crore.
• Apart from spectrum and other telecom asset sales, RCom is planning to raise an additional Rs10,000 crore through its properties in Dhirubhai Ambani Knowledge City in Navi Mumbai and Delhi among others.
• Further, the plan proposes that lenders convert Rs7,000 crore of their loans into equity, giving them control of the firm. “They will also have the freedom to bring in an external investor who will take a call regarding the change in management,” said Garg.
• At Monday’s (Oct 30,2017) closing price of Rs 15.7 a share, RCom had a market capitalization of Rs3,907 crore. If lenders convert at this price, they could get a 64% stake in the firm.
• The sales of telecom and real estate assets, and the conversion total up to Rs34,000 crore. Another Rs5,000 crore worth of debt is unsecured.
• Subject to the plan materializing, the telecom firm will be left with a debt of Rs6,000 crore. It is believed this will be sustained after its winds up its 2G and 3G voice businesses, and only focus on the business-to-business and 4G businesses.
• The firm’s senior management said that rivals such as Mukesh Ambani-owned Reliance Jio Infocomm Ltd have shown interest for “several” of its assets. It also said that the joint lending forum, a grouping of its creditors, will handle asset sales transactions and it won’t strike any ‘bilateral’ deals.
• “There will not be any bilateral dealings anymore. The lenders will decide the best deal available from now on,” said Garg. Jio, for instance, “was not interested in bilateral dealings and wanted the process to be transparent,” said Punit Garg, executive director at RCom. The lenders have hired SBI Capital Markets as the adviser for the asset sales, he added.
• Garg said the firm expects to complete the debt reduction plan by March 2018. “None of these transactions require regulatory clearances and will be easy to execute.”
• On being asked if it has received approval for the plan, Garg said “do you think lenders can refuse a zero write-off plan. They got to be so happy and thrilled.”
• “We will resolve the unsecured portion of the debt after tackling the secured portion,” said Garg.
• In June 2017, RCom lenders had invoked the strategic debt restructuring scheme. It allows lenders to take over management control. The lenders, however, had given a seven-month breather to the firm till December.
• Under its earlier deleveraging plan, RCom had said it would cut its debt by 60% of its debt by December through a merger with Aircel Ltd and sale of majority sake in its tower business to Canada-based investment firm Brookfield Infrastructure.
• The Aircel plan collapsed due to regulatory and legal hurdles. The Brookfield deal is still on but other investors can also bid now. “The deal valuation is likely to be revised downwards,” Garg said.
Economic Times Article Dated Nov 12, 2017
• The company has also proposed the conversion at Rs 24.71 to Rs 24.73 a share, the price being arrived at according to the formula prescribed by the Reserve Bank of India (RBI) on SDR.
• Lenders, however, are opposed to it since the shares of the company have since fallen to Rs 14-15 a share. Conversion at this rate will result in huge mark to market loss for the lenders.
• The second option of converting debt into equity, as per the RBI formula, would be the break-up value of the company, which according to it was Rs 97 a share.
• But bankers say that material developments such as the collapse of the deals with Aircel and Brookfield have made all other assumptions irrelevant. “These two moves would have lowered debt by Rs 25,000 crore and in the absence of these, lenders feel the need for a fresh valuation,” said one of the bankers cited above.
Live Mint Article Dated Nov 15, 2017
• Reliance Communications (RCom) said on Wednesday that it is not making any payment to lenders or bond- holders for the time being as it is under ‘standstill period’ with invocation of strategic debt restructuring scheme and working on asset monetisation.
• In a regulatory filing, the telecom operator said that is in standstill period till December 2018 pursuant to the SDR (strategic debt restructuring) guidelines. “The Company has also announced various asset sales and a comprehensive debt resolution plan, as advised per our earlier letter dated 30th October 2017. Accordingly, for the time being, no payment of interest and/or principal is being made to any lenders and/or bondholders of RCom,” the Anil Ambani led firm said in a BSE filing.
• The filing was in response to query of the stock exchange on report around RCom defaulting on payment of a US dollar bond. On 30 October, RCom said that it plans to pay debt of 27,000 crore through asset monetisation, Rs7,000 crore through equities and carry forward debt of Rs6,000 crore to new business. The company has said that it plans to implement its debt resolution proposal within the standstill period.
Moody’s Investors Service - withdrawn rating of the Company and Senior Secured Notes (Bonds).