RCom bondholders approve $3.84b asset fire sale

22 Mar 2018

The holders of India's Reliance Communications' (RCom) $300 million in bonds have overwhelmingly voted to approve the operator's planned wireless asset sale to Reliance Jio Infocomm as part of its zero write-off debt reduction program.

At a meeting in London this week, bondholders signed off on resolutions to allow the sale of the company's spectrum, tower, fiber and related telecoms infrastructure as well as certain real estate assets to Reliance Jio.

Subject to obtaining lender consents and regulatory approvals, this sale is required to close by March 31. The sale is expected to reduce RCom's debt by around 250 billion rupees ($3.84 billion).

Bondholders also approved a plan to monetize 125 acres of real estate in the planned Navi Mumbai township via a special purpose vehicle, which is expected to provide the company with long term debt refinancing of up to 70 billion rupees ($1.08 billion).

Following the debt restructuring, RCom's final residual financial debt is expected to be reduced to around 70 billion rupees.

RCom's continuing operations would include its B2B focused business segments, including fixed line operations and data centers in India and one of the largest private subsea cable networks in the world, the company said.

RCom first arranged to sell its wireless assets to Jio late last year as it sought to fend off insolvency petitions and tackle its rising debt. Ericsson had filed an insolvency petition that had threatened to block the deal, but India's National Company Law Tribunal recently ordered the two companies to work out a settlement agreement in the case.

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