RCom revamp plan recap: Airtel, Jio eye assets; tower deal to be reworked

With Reliance Communications selling off its DTH business, various private equity firms and telcos are looking to buy the debt-laden firm’s assets and invest in what will be left of the telecom major, which will primarily have only its business-to-business segment. 

 

The Anil Ambani-led company is selling off businesses to pay off Rs 27,000 crore out of Rs 45,000 crore debt on its books, it had stated last month. Under a debt restructuring plan, apart from the sale of assets such as telecom towers, spectrum, optical fibre and real estate, RCom has suggested its consortium of banks convert part of their loans into 51 per cent majority equity in the truncated company.

Business Standard brings you the full coverage of major announcements of Reliance Communication:

Telcos, PE firms show interest in Reliance Communication's assets

Telecom companies and private equity (PE) funds have shown preliminary interest in buying the various assets Reliance Communications is monetising. Airtel has shown interest in buying some of the spectrum, as well as telecom equipment of RCom’s wireless business, up for sale. Reliance Jio, Vodafone and Sistema (which merged its business in RCom) are believed to be the others interested. 

According to sources, PE funds are interested in taking a stake if the banks agree to take 51 per cent stake. These include KKR, TPG and Carlyle, besides global telecom entities Telstra of Australia, Telekom Indonesia and PCCW in Hong Kong. (Read full report)

RCom has nine data centres across the country and a thriving enterprise business, with about 35,000 corporate clients. According to estimates, this business currently has revenues of Rs 10,000 crore annually, the operating earnings being Rs 1,500 crore.  

RCom reworking tower deal with Brookfield

Debt-laden Reliance Communications on Tuesday said it is renegotiating the tower business deal with all interested parties, including Brookfield Infrastructure Group.

In December last year, Reliance Communications had inked binding agreements to sell 51 per cent stake in its tower business to Canada-based Brookfield Infrastructure and its institutional partners for Rs 11,000 crore but the deal fell through after the company called off its merger with Aircel. (More details)

Sells off DTH business

Reliance Communications (RCom) has signed a memorandum of understanding with Veecon Media and Television Limited for the sale of its subsidiary Reliance BIG TV Limited, which is engaged in direct to home (DTH) services across India. Veecon will acquire the entire shareholding of Reliance Big TV on an ‘as-is where-is’ basis, along with all existing trade liabilities and contingent liabilities. The transaction is in consonance with RCom’s stated objective to focus on core businesses.

The existing DTH license of BIG TV shall be renewed with the submission of the required bank guarantees with the Ministry of Information and Broadcasting by the buyer. 

The transaction will help reduce the liability of unsecured creditors, benefitting all stakeholders, including lenders and shareholders of RCom. (Click here to read more)

Reliance Communications to shut voice calls from Dec 1

Loss-making telecom operator Reliance Communications (RCom) will shut down its voice call service from December 1 and its customers can move to other networks by the end of the year, as per directions issued by the telecom regulator on Friday. 

The interest payment of about $9.75 million is the latest test for the debt-laden company, which has faced a series of setbacks amid a shakeout in the world’s second-largest telecom market. Last month, it announced the collapse of merger plans with rival Aircel, a deal which could have helped it pare debt.

The firm, with a customer base of 75 million people, proposed earlier this week that lenders convert Rs 7,000 crore of debt into equity. In the past month, it also withdrew a regulatory document seeking a nod to sell its towers and faced another insolvency petition. The flagship company of the Reliance Group is in a so-called standstill period with lenders, and isn’t paying interest and principal on loans until December 2018. 

The $300 million of bonds on which the firm must pay the semi-annual coupon on Monday mature in 2020. (Read more)