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RCom stock zooms; SBI says deal protects lenders' interest

The stock surged 16.99% to settle at Rs 36.22 on BSE

Press Trust of India  |  New Delhi 

File photo of Anil and Mukesh Ambani Picture by Kamlesh Pednekar
File photo of Anil and Mukesh Ambani Picture by Kamlesh Pednekar

(RCom) shares continued their rally for the fourth straight session on Friday, ending 17 per cent higher after stepped in to bail out the debt-ridden firm by acquiring spectrum, tower, optical fibre network and other assets.

The stock surged 16.99 per cent to settle at Rs 36.22 on BSE. During the day, it soared 34.91 per cent to Rs 41.77 — its 52-week high. At NSE, shares of the company jumped 16.99 per cent to close at Rs 36.15.

In terms of equity volume, 77.077 million shares of the company were traded on BSE and over 68 crore shares changed hands at NSE during the day. In four days, shares of the company have zoomed 122 per cent adding Rs 5,506.76 crore to its market capitalisation. While the firms did not disclose the deal size, banking sources pegged the transaction value at Rs 24,000-25,000 crore.

The mega telecom deal involving acquisition of wireless assets of debt-laden RCom by is a “good and welcome development” that fully protects lenders’ interest, State Bank of India (SBI) Chairman Rajnish Kumar said on Friday.

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The deal also sets a great example for promoters of other stressed companies, Kumar told BTVi.

On Thursday, the two announced a blockbuster deal under which Jio, promoted by Mukesh Ambani, will acquire the wireless assets of troubled RCom, a company owned by younger sibling

ALSO READ: Ambani dials Ambani: Jio to buy RCom's mobile biz assets for Rs 24,000 cr

“...in general terms, I can say that it is a very good and welcome development where the banks have been fully protected and no loss is expected despite the fact that there is a stress in the telecom sector,” Kumar said.

The proceeds of the deal, slated to be completed between January-March 2018, will provide much-needed respite to the RCom whose debt stands at a staggering Rs 45,000 crore. The company hopes to use the entire proceeds to pare its debt.

Just two days before the deal was unveiled, RCom announced its exit from the strategic debt restructuring (SDR) and outlined an ambitious revival plan that involved zero write-offs to lenders. Over a dozen banks, including SBI, PNB, and Bank of Baroda, have an exposure to RCom.

Meanwhile, a Reuters report on Friday said China Development Bank, a creditor of RCom, was in talks with the firm, following a plan by the Anil Ambani-backed firm to reduce its debts. Any progress will be disclosed in the near future, the bank told Reuters late on Thursday. Last month, the China Development Bank initiated insolvency proceedings at National Company Law Tribunal.

First Published: Sat, December 30 2017. 01:32 IST
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