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India's RCom reveals plan to reduce debt by 85%

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India's RCom reveals plan to reduce debt by 85%

Reliance Communications Ltd. announced its exit from the Reserve Bank of India's strategic debt restructuring framework without any equity conversion and loan write-offs for lenders and bondholders.

RCom expects the debt to reduce by 250 billion Indian rupees from the sale of its telecom business, including spectrum, towers, fiber and other assets. The company said it has received final bids on the proposed sale of its telecom assets. RCom said the commercial development of the proposed Dhirubhai Ambani Knowledge Center will help reduce its debt by an additional 100 billion rupees. RCom also announced an equity infusion from its global strategic partners to further reduce debt.

RCom also entered into an agreement with China Development Bank and other lenders "to ensure a substantial prepayment," the Press Trust of India reported Dec. 26.

Following the completion of all transactions, the company expects a reduction of over 85% of its total debt, with its balance debt expected to be down to 60 billion rupees, according to a Dec. 26 news release.

The transactions are expected to close in phases, between January to March 2018. The transactions are subject to approval from lenders and other customary clearances.

RCom said it will focus on non-mobile global and Indian enterprise businesses including data centers and submarine cable networks.

As of Dec. 26, US$1 was equivalent to 64.06 Indian rupees.