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Reliance Communications (RCom) surged 25% to Rs 26.66 on Wednesday morning, extending its previous day’s over 30% rally on the BSE, after the company announced debt cut plan. In the past two trading sessions, the stock zoomed 63% from Rs 16.31 on Friday, December 22, 2017, while, in past six trading days, it soared 125% from Rs 11.83 on December 18. Anil Ambani-owned RCom said on Tuesday it has exited the strategic debt restructuring (SDR) scheme of lenders by agreeing to sell its telecom towers, real estate and other assets, and getting a strategic investor in the “new RCom”, which would help reduce its debt by Rs 39,000 crore. “The company exit from RBI’s SDR framework, with ZERO equity conversion and ZERO loan write-offs for lenders and bond holders. Upon completion of all transactions as announced, the balance debt in RCom is expected to be around Rs 6,000 crore only, representing reductions of over 85% of total debt,” RCom said in a press release. All stakeholders of RCom, including inter alia lenders, bondholders, customers, vendors and employees, and over 1.3 million shareholders will benefit from the fast track debt resolution.
The Company is also engaging with its unsecured creditors, and expects to arrive at a resolution over the next few weeks, it added. At 09:41 AM; the stock was trading 19% higher at Rs 25.35 on the BSE, as compared to 0.2% rise in the S&P BSE Sensex. The counter has seen huge trading volumes with a combined 173 million shares changed hands on the BSE and NSE so far.