Stocks of Anil Ambani group companies such as Reliance Communications (RCom), Reliance capital, Reliance Infrastructure and Reliance Power faced heavy selling and lost up to 12 per cent following reports that RCom has not paid a coupon on its 2020 dollar notes. RCom said it is not making any payment to lenders or bond-holders for the time being as it is under ‘standstill period’ with invocation of strategic debt restructuring scheme and working on asset-monetisation.
While RCom fell by 12.12 per cent to Rs 10.15 on the BSE, Reliance Capital plunged by 10.21 per cent to Rs 422.75, Reliance Infra by 9.16 per cent to Rs 417.40 and Reliance Power by 8.55 per cent. Reliance Nippon Life, which was listed recently, declined 6.87 per cent to Rs 254.20.
Stating that it is working on asset-monetisation, RCom said that is in standstill period till December 2018 pursuant to the strategic debt restructuring guidelines.
“The company has also announced various asset sales and a comprehensive debt resolution plan, as advised per our earlier letter dated October 30, 2017. Accordingly, for the time being, no payment of interest and/or principal is being made to any lenders and/or bondholders of RCom,” the firm said.
The filing was in response to query of the stock exchange on report around RCom defaulting on payment of a US dollar bond.
According to a Bloomberg report, Reliance Communications failed to pay a coupon on its 2020 dollar notes before the expiry of a grace period on Monday. “It’s India’s most high-profile default on international debt since the nation’s insolvency and bankruptcy code was passed in May 2016. The defaulted 2020 notes issued by RCom, once India’s second-largest wireless operator, were trading at about 35.6 cents on the dollar as of 2.15 pm in Hong Kong. The company also missed interest payments due on November 2 and 7 on two rupee-denominated bonds,” the Bloomberg report said.
On October 30, RCom said that it plans to pay debt of Rs 27,000 crore through asset monetisation, Rs 7,000 crore through equities and carry forward debt of Rs 6,000 crore to new business. The company has said that it plans to implement its debt resolution proposal within the standstill period.
“RCom’s debt resolution plan envisages no loan write-off by the lenders. RCom will pay off up to Rs 17,000 crore of its debt, out of the proceeds of monetization of spectrum, towers and fiber and MCN (media convergence nodes) assets. RCom will pay additional Rs 10,000 crore of its debt, out of the proceeds of sales and commercial development of DAKC and other prime real estate assets across 8-metros,” it had said.