RCom to complete deals by September to raise cash: Anil Ambani

Telecom industry may see up to 40,000 job losses this year, says CFO Puneet Garg

Reliance Communications Ltd, battered by concerns over its debt burden, said on Friday it plans to complete deals to sell part of its wireless and tower business by September 2017, three months before a deadline set by its lenders.

Anil Ambani, RCom chairman, added the company's lenders had accepted a company-proposed overhaul plan and given the group until December to conclude the process. He added lenders would allow the company to pause debt repayments until December.

CFO Puneet Garg said, "Ongoing stress in telecom industry will end up reducing 30,000-40,000 more jobs this year."

The telco held a media briefing on Friday in a bid to reassure investors after worries over the mobile carrier's heavy debt load rattled markets and triggered ratings downgrades.

Chairman Anil Ambani says plan for firm's strategic transformation has been accepted by lenders. 

"We expect to close Aircel deal, tower transaction with Brookfield by September and these deals will reduce debt to Rs 20,000 cr from existing Rs 45,000 cr," Ambani said. 

He expressed disappointment with credit rating downgrades of RCom and said the company will make efforts to restore them. 

"We may look at strategic sale of RCom's global business to further pare our debt and a new wireless firm Aircom will be set up after the merger with Aircel," he said.

Garg said the telecom sector is heavily burdened by tax and government should look at rationalisation.

"Reduced EBITDA of sector insufficient to cover debt obligations and airwave payments," he said.

RCom has seen its market value slashed by a third after shares have plunged since May 5 when ratings agency ICRA downgraded its debt over concerns about its profitability and debt loads.

Garg said industry is seeking three-year moratorium on government levies, airwave payments, taxes 

He added that the industry is also seeking lowering of license and spectrum fees and mobile termination charges 

"The industry is seeking long term loans to telecom sector under 5/25 scheme and easing of external commercial borrowings policy restrictions is sought," Garg said.

Fitch Ratings on Thursday downgraded RCom further into junk territory, and warned of a potential default, days after rival Moody's Investors Service had also slashed its ratings.

The company has sought to assuage concerns by saying it intends to cut its debt load by about 60% by repaying Rs 25,000 crore worth of loans by end-September, using money from an expected deal to merge its wireless unit with a rival and the sale of a stake in its mobile masts business.