RCom plans to monetise non-core assets to lower debt

Reliance Communications today said it is looking at monetising its non-core assets to bring down the debt-to-EBIDTA ratio to about 3 in 18-24 months.
To achieve this target, the Anil Ambani-owned firm is planning to hive off its DTH business, sell stake in international operations at Reliance Globalcom and a possible divestment in its tower unit Reliance Infratel, among others.
"We are looking to bring down our debt-to-EBIDTA ratio to around 3 within 18-24 months and are looking at monetising our non-core assets to deleverage the balance sheet," Reliance Communications (RCom) CEO (Consumer Business) Gurdeep Singh said during an investors call today.

He added: "For this, we are looking at hiving off the DTH business, stake sale in our international operations at Reliance Globalcom, monetisation of our real estate assets, as well as a possible divestment in Reliance Infratel, which handles our towers portfolio."
The company's net debt-to-EBITDA ratio currently is about 4.64.
In general terms, debt-to-EBITDA ratio is the measure of the ability of a firm to pay off its debts and is a useful tool in assessing the creditworthiness of a company.

Singh said GSM and data business grew by 3.5 per cent Q-o-Q and CDMA voice business grew 0.2 per cent Q-o-Q (with 76:24 mix between GSM+Data/CDMA voice) resulting in an overall 2.7 per cent growth Q-o-Q in the India telecom operations.

"Our CDMA revenue growth, reversing the earlier declining trend, was largely due to acquisition of high ARPU customers and launch of innovative products such as WiPods, WiFi & MiFi Routers and dongles, which have been very successful in the market," he added.
The net debt of the company stood at Rs 36,725.7 crore at the end of March 31, 2015.
RCom plans to invest about Rs 1,500-2,000 crore in the current fiscal to increase its data business.
"We will invest in the range of Rs 1,500-2,000 crore this fiscal. Our focus area would largely be to increase data revenue," Singh said.