RCom stocks hit new low, nosedive to 14% after Q2 losses widen

The share of Anil Ambani led Reliance Communications took a hit when they stoop to a new low on Monday. The shares fell to 14% after the company's Q2 losses widened raising doubts on the debt restructuring plan. 

RCom had reported a loss of Rs 1,210 crore in the previous quarter.

RCom earlier had said that it will sell its direct-to-home (DTH) subsidiary Reliance BIG TV to Veecon Media and Television.

The companies have entered into a binding memorandum of understanding to this effect and as part of the agreement, Veecon will retain nearly 500 employees of Reliance BIG TV.

Veecon will acquire the entire shareholding of Reliance BIG TV with business on an as-is-where-is basis, along with all existing trade liabilities and contingent liabilities, according to a statement from Reliance Communications (RCom).

The financial details of the deal were not immediately disclosed.

"The existing DTH licence 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 statement said.

Reliance BIG TV's 1.2 million customers will continue to enjoy uninterrupted services. "The transaction will help reduce the liability of unsecured creditors, benefiting all stakeholders, including lenders and shareholders of RCom," it said.

The deal is subject to requisite approvals from licensors, regulatory authorities and lenders of RCom. The transaction is part of RCom's efforts to focus on B2B businesses. RCom, which plans to shut down voice call service from December 1, 2017, has also made a comprehensive debt resolution plan to its domestic and foreign lenders.