New Delhi: Billionaire Anil Ambani-led Reliance Communications, which plans to shut mobile telephony business by November-end, on Monday said lenders will convert part of their debt to equity to gain 51 per cent control of the company.
The firm will sell telecom tower and real estate businesses to pay off Rs 27,000 crore out of Rs 45,000 crore of debt on its book, RCom said in a statement.
"Debt of Rs 7,000 crore is proposed to be converted into 51 per cent of the company's equity, as per the SDR guidelines of the Reserve Bank of India," it said.
RCom said it has made a comprehensive "debt resolution plan to its domestic and foreign lenders".
Under the plan, lenders would not have to write off any of their loans, it said.
The 'no-loan write-off' plan involves payment of up to Rs 17,000 crore debt out of proceeds of monetisation of spectrum, tower and fibre assets. An additional Rs 10,000 crore would be paid by selling real estate in the Dhirubhai Ambani Knowledge City in Mumbai and other properties across eight metros.
"The new RCom will have sustainable and profitable B2B - non mobile business," it said without elaborating.
The new RCom will have "sustainable and conservative level of debt of only Rs 6,000 crore", it added.
"Cost of debt will be lower due to ability to raise debt funds overseas at low cost," it added.
The statement further said that the company is under a standstill period (for interest and principal repayments) till December 2018 and expects to complete the SDR (Strategic Debt Restructuring) process as per applicable RBI guidelines.
The company plans to shut down its loss-making wireless telephony business by November 30 and concentrate only on 4G Internet services.
As per sources in the industry and those privy to the development, the firm has asked its 1,500-2,000 employees to look for jobs as 2G and 3G cellphone services business will be shut down from November 30.
The company, last week, had issued a short statement, saying it will adopt a 4G focused strategy for profitable growth of its wireless business....