Reliance Group, the financial services to armaments conglomerate, is mulling several options to ensure the survival of its Reliance Communications (RCom), according to billionaire chairman Anil Ambani.
“Telecom is now in the ICU...paracetamol and aspirin won’t help,” Mr. Ambani told shareholders of the debt-laden telecom company, which is battling for survival in the face of an insolvency petition filed by supplier Ericsson. “A constructive solution with all players needs to be found. As far as RCom is concerned, we have a transformation programme in place and running. We have regulatory challenges, legal challenges, corporate rivalries. One shareholder delayed the SSTL merger with RCom by 10 months. Motivated? Corporate rivalry? I don’t know,” he said.
Talking about the insolvency proceedings initiated by Ericsson at the National Company Law Tribunal (NCLT), Mr. Ambani said, “One unsecured lender has approached the court (NCLT). We will take matters to the logical conclusion. We will not be tortured, tormented or blackmailed by anyone. We have more than one plan. We have backup options. There are multiple options to ensure we have appropriate solutions. Everyone wants solutions yesterday. However, there is no magic wand. It takes time and process. We will ensure that within this financial year, we will have clarity.”
RCom had got a moratorium till December 31 from lenders to reduce ₹25,000 crore, or 60% of its debt, by selling its tower assets and merging the wireless business with Aircel.
Rights issue
Addressing shareholders of four group companies on Tuesday, Mr. Ambani also announced plans to list Reliance Capital’s general insurance business and Reliance Naval’s aim to bid to build submarines.
“With regard to Reliance Naval, the mandatory requirement for change of ownership is what we’ve achieved with our 31% shareholding,” Mr. Ambani said at the AGM of Reliance Infrastructure. “We have the ability to increase our shareholding to 36%. We will be shortly announcing a rights issue and through the rights issue, we will have the ability to increase our shareholding,” he said.
Earlier in the day, Mr. Ambani’s son, Anmol Ambani, executive director Reliance Capital, announced the non-banking finance company’s plan to foray into standalone health insurance business and spoke about its digital initiatives.
“To create retail focus we are setting up a standalone health insurance company,” Mr. Anmol said. “We have already received round one approval from the IRDA. We expect to become operational beginning early next year. We will use technology to connect with customers and distributors to leapfrog competition,” added the 25-year-old graduate from Warwick Business School in the U.K.
“We are increasing our digital footprint — we are going ‘phigital’. I am happy to report to our shareholders that the share of digital towards our revenues is growing steadily across all our businesses,” the Ambani scion added.
Addressing the shareholders of Reliance Power, Anil Ambani said that the company’s 750 megawatt (MW) power project being built at the cost of $1 billion in Bangladesh is expected to achieve financial closure in the current financial year.
On the infrastructure front, Mr. Ambani said Reliance Infrastructure had started talks with Japanese firms for setting up joint ventures as part of the group’s goal to participate in the ambitious ₹1 lakh crore bullet train project.
Banking on defence as a sunrise sector, Mr. Ambani said, “government is shortly going to award contract for six submarines worth ₹50,000 crore. With the acquisition of Pipavav, we are one of the only two companies in India strategically positioned to participate in Government of India’s strategic partnership programme to build submarines. For the first time in India, a private sector company will be actually building a submarine.”
