New Delhi: Debt-laden Reliance Communications on Friday said it would not be paying interest on Non-Convertible Debentures (NCDs) till completion of its restructuring exercise.
The move comes close on the heels of a mega deal announcement late last month that Reliance Jio, owned by billionaire Mukesh Ambani, will acquire the spectrum, tower, optical fiber network and other wireless assets of Reliance Communications.
While the two companies have not disclosed the deal size, banking sources peg the transaction value at Rs 24,000-25,000 crore. In a regulatory filing today, RCom said:
"The asset sale proceeds shall be utilised to repay company's debt including NCDs in such manner as may be decided by JLF (joint lenders forum)...company shall not pay or fix any record date for payment of interest on NCDs till completion of restructuring process."
At present, the company is working "expeditiously" to complete the process and expects to close the deal in a phased manner between January and March 2018, subject to statutory approvals, it added.
The RCom-Jio deal announced on December 28 (coinciding with the 85th birth anniversary of Reliance founder Dhirubhai Ambani) packs in 122.4 MHz of 4G Spectrum in the 800/900/1800/2100 MHz bands, over 43,000 towers, 1,78,000 kilometres of fiber and 248 media convergence nodes.
The deal will bring an immediate relief to RCom, which is reeling under Rs 45,000 crore debt, and the company hopes to use the entire proceeds to pare its debt.
Just two days before the blockbuster deal, Reliance Communications - promoted by Anil Ambani - had announced its exit from the strategic debt restructuring (SDR) and outlined an ambitious revival plan that involved zero write-offs to lenders.