Anil Ambani announced plans to immediately reduce debt of RCom to approximately Rs 20,000 crore
Mumbai,June3: In a rather rare occasion, Anil Ambani today, addressed a press conference on how the group is dealing with resolving debt issues at Reliance Communications (RCom). This comes after Fitch Ratings downgraded RCom and warned of a potential default, just days after rival Moody’s Investors Service, slashed its ratings
Mr. Ambani (57) explained that the company is expeditiously closing the already announced strategic transactions with Aircel and Brookfield, to immediately reduce debt from Rs 45,000 crore to approximately Rs 20,000 crore; which is a reduction of 60 per cent or Rs. 25,000 crore.
“Just two transactions will reduce debt by 60 per cent. It is the largest ever debt reduction effort by any company in India,” Mr. Ambani added. He also said that all lenders were supportive of the debt restructuring plan.
In a relief, the company has been given seven months from lenders both domestic and foreign (a standstill period) to close the deals and formulate a long term plan to keep the remaining debt at sustainable levels.
Towards the end of the press conference Mr Ambani, speaking in a lighter vein, said, “I can only tell you that since you linger with those thoughts, they (relations) are the most cordial, meaningful and full of respect. So any speculation from your side is completely unnecessary and uncalled for and you better put a skull and two bones on that thought.”
Mr. Ambani’s elder brother, Mukesh is the chairman of Reliance Industries and also the richest man in India. Their father, Dhirubhai Ambani, the founder of Reliance Industries died in 2002. The businesses were divided between the two brothers in 2011 after a dispute over ownership and the acrimony between them earlier has been widely reported.
Mukesh Ambani’s Jio and Anil Ambani’s RCom currently have pacts to share and trade spectrum and also have tower and fibre-sharing agreements. RCom is also tying up with another telecom service provider, Aircel to improve the business.