Lenders to Reliance Communications (RCom) have given the loss-making telecom operator two months to rope in new investors and finalize a plan to reduce its massive debt. The Anil Ambani Group company’s debt was downgraded on Oct 4 over delays in lowering debt levels, and the rating company warned of further cuts in ratings. Anil Ambani’s flagship company Reliance Communications network runs partly on its own towers and partly on rented towers.
Indus Towers, Bharti Infratel, American Tower Company and GTL Infrastructures are the main tower firms which rent tower space to Rcom. The telco is focusing on operating as a 4G-only operator, complemented by intra-circle roaming pacts with other telcos and spectrum sharing with Reliance Jio. In June, a consortium of lenders had given the Anil Ambani-led company seven months time to pare its Rs 45,733 crore debt and service loans regularly.
As part of the SDR scheme, banks will be able to convert their loans to the company into equity after the seven months. Equipment vendor Ericsson has even filed bankruptcy proceedings against the company to recover about Rs 1,150 crore. It partly manages Rcom’s network and filed in its suit that payments were pending since January. Lenders said the conversion rate will be based on the average share price for 10 days before the conversion date.