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Reliance Communications proposed a debt-repayment plan in October 2017 that paired asset sales with lenders converting about Rs 7,000 crore of debt into equity. The conversion would have given lenders a 51% stake, but it was a proposal—not an approved or completed restructuring. Mint reported on November 28, 2017, that lenders had not approved it.
What Reliance Communications proposed
After its proposed wireless-business combination with Aircel fell through, Reliance Communications (RCom) presented creditors with a fresh plan on October 20, 2017. Mint reported that the plan aimed to raise Rs 27,000 crore through sales of assets including spectrum, real estate and towers, then reduce debt by a further Rs 7,000 crore through a debt-to-equity conversion. The figures describe planned components, not proceeds or debt reduction already achieved. Mint’s October 2017 report
| Proposed mechanism | Reported amount or effect | How it was intended to work |
|---|---|---|
| Asset monetisation | Rs 27,000 crore planned | Sell assets including spectrum, real estate and towers to raise funds for debt repayment, according to Mint’s October 2017 report. |
| Debt-to-equity conversion | Rs 7,000 crore proposed reduction | Convert lender claims into equity, giving lenders a 51% stake, as reported by Mint and Scroll in 2017. |
Why lenders would take a 51% stake
The proposed conversion would have exchanged part of RCom’s debt obligations for ownership in the company. In return for taking equity, lenders would have held a controlling 51% stake. Scroll reported that promoter holding was expected to decline from 59% to 26%. Those percentages were contemporaneous expectations about the proposed transaction, not evidence that the ownership change occurred. Scroll’s October 31, 2017 report
How large was RCom’s debt?
Scroll described RCom’s total debt as exceeding Rs 45,000 crore. Mint separately reported debt of Rs 44,345 crore as of March 31, 2017. These are differently framed figures from separate contemporaneous reports; the March 31 figure is a dated amount, while Scroll used an approximate description of debt in its October report. Neither should be treated as a precise measure of the other’s figure.
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Why a new plan followed the Aircel deal’s failure
RCom’s earlier proposal involved combining its wireless business with Aircel and selling a majority stake in its tower unit to Brookfield Infrastructure. Lenders invoked the Strategic Debt Reduction mechanism in June 2017 after that earlier restructuring proposal. The Aircel combination later fell through after regulatory approvals were not obtained, prompting RCom to put forward the October plan. Mint; Scroll
What was reported after the proposal
Scroll reported that a standstill on principal and interest repayments was in place and that banks would try to sell the company to a strategic investor by December 2018. That was a reported intention at the time, not evidence that a sale took place. In a separate development, Mint reported that China Development Bank filed an insolvency case before the Mumbai National Company Law Tribunal on November 24, 2017. RCom said it had not been served notice of the application, according to Mint. The insolvency filing was distinct from the October repayment plan, which Mint said lenders had not approved as of November 28, 2017. Mint’s November 2017 follow-up
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What RCom said about Jio’s interest in its assets
Scroll relayed a statement by RCom executive director Punit Garg, as reported by The Hindu: “They [Jio] do not want to deal directly but have shown interest in bidding for many of our assets in a transparent manner.” The comment concerned potential asset bids; it does not establish that Jio bought any assets under the proposed plan.
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