Reliance Communications, the Anil Ambani-led telecom operator, said that it has formally advised all its lenders that it will be making repayment of an aggregate amount of Rs 25,000 crore from the proceeds of Aircel and Brookfield transactions.
“The said amount will cover not only all scheduled repayments but also include substantial pre-payments to all lenders on a pro-rata basis,” RCom spokesperson stated in a statement.
RCom said that it is presently engaged in discussions with its lenders to obtain their requisite consents for the two transactions and to refinance scheduled instalments falling due in the interim period up to September 30, 2017, to facilitate the expeditious closing of both transactions in the best interests of all stakeholders.
“Based on a large number of approvals already received for the two transactions and continuing good progress for the balance, RCom expects to meet its all debt repayment obligations in line with these plans, and substantially reduce its overall debt,” the spokesperson added.
RCom earlier this week told media that it would close its ongoing process of merging its mobile business with Aircel and the sale of tower assets to Brookfield in the next four months. The telco reportedly said that these transactions would help it to bring down its debt substantially from Rs. 36,726 crore, as of March 31.
The telco had stated that the combined RCom-Aircel entity would enjoy substantial benefits of scale, and CAPEX and OPEX synergies with an estimated NPV of Rs. 20,000 crore. As part of this transaction, RCom’s overall debt will reduce by Rs 14,000 crore, together with the transfer of liability for spectrum instalments of an additional approx. Rs. 6,000 crore.
The telco’s net loss widened in the fourth quarter at Rs 966 crore from Rs 531 crore net loss in the previous quarter, due to free offers, disruptive pricing and hyper competition in the market.
“For the first time in over 20 years, the telecom sector registered de-growth in revenues, leading to a reduction in the Government’s share in revenues, sharp drop in operating margins, accompanied by increased interest costs arising from a staggering industry debt burden, and higher depreciation and amortisation charges as a result of higher spectrum purchase costs,” the telco said in a statement.
Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.