Reliance Communications (RCom) has sought an upfront payment of $1.2 billion from the Chinese consortium of lenders in lieu of the joint development rights to the 125-acre Dhirubhai Ambani Knowledge City (DAKC), owned by the company, in Navi Mumbai. If the deal goes through, both the company and Chinese lenders will have joint development rights to the property, according to sources.
The company, however, did not respond to a questionnaire sent to it.
Loans by Indian lenders to Anil Ambani-led RCom will be classified as a non-performing assets (NPA) in the third quarter ended December 31, 2017, but lenders expect the company to start making repayments before the close of the fourth quarter. The company expects its deal with Reliance Jio to close during the quarter, which will help the company pare its debt to domestic banks.
A senior Union Bank of India official said, "We have classified the account as an NPA in the third quarter, but we expect some part of the repayments to flow in the fourth quarter which will help us reverse the status on the account."
The company owes banks about Rs 45,000 crore, of which the domestic lenders have an exposure of Rs 22,000 crore. The company said the sale of its telecom assets to Reliance Jio will be enough to take care of the domestic banks' debt.
In December, Jio agreed to buy RCom's wireless spectrum, media convergence node assets, 43,000 towers, and around 178,000 km of fibre network for an undisclosed sum which will be utilised to repay the domestic lenders who have an exposure of Rs 22,000 crore to the company. The deal involves primarily cash payment and an assumption of the deferred spectrum payment liabilities of RCom to the telecom department. Reliance Industries was also in the market to raise about $2 billion to part-fund the deal.
In a report last month, ratings agency Icra said that any additional debt due to the acquisition will not impact Reliance Jio's credit profile, given the strong backing of its parent.
In December 2017, RCom had announced a new asset monetisation plan and its exit from the strategic debt restructuring programme which is accepted by the lenders.
While announcing its financial results on January 29, RCom said in a release, "Asset monetisation of spectrum, tower, fibre and telecom infrastructure are on track – to close by March 2018 subject to regulatory approvals."
Ambani said his company had agreed to a new debt resolution plan that will see RCom sell its assets –spectrum, fibre, telecom towers and real estate, apart from DAKC—and does not entail lenders and bondholders writing off dues or converting it into equity. Through this process, the company hoped to cut RCom's debt by Rs 39,000 crore from the Rs 45,000 crore it owed lenders.
RCom's planned exit from its consumer business resulted in a sharp drop in net quarterly loss by over 95%. Consumer business comprised wireless, direct-to-home and PCO. RCom's net loss reduced to Rs 130 crore as against trailing quarterly loss of Rs 2,712 crore.
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The company owes banks about Rs 45,000 crore, of which the domestic lenders have an exposure of Rs 22,000 crore. The company said the sale of its telecom assets to Reliance Jio will be enough to take care of the domestic banks' debt.
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