Reliance Communications (RCom) on Friday secured the approval of its overseas bondholders to ease the company’s debt burden, a move that will help the debt-laden firm avert bankruptcy.
“RCom bondholders approved the tender and exchange offer of $300 million bonds with an overwhelming majority of over 83%, at their meeting held today, 24 August 2018, in London,” said the company in a statement adding that pursuant to the offer as approved, the bondholders will receive cash proceeds of up to $118 million. The bondholders would also get $55 million bonds to be issued by Global Cloud Xchange Limited, a foreign subsidiary of RCom, according to the statement.
RCom had defaulted on $300 million bonds last year and the vote was crucial for the telecom major as settling the matter was a precondition for RCom to reorganise its larger local debt of more than ₹42,000 crore.
RBI circular
In February, the Reserve Bank of India mandated banks to identify projects with even a day’s default as stressed assets and conclude the resolution proceedings in 180 days. The circular came into effect on March 1 and the 180-day deadline concludes on August 27.
RCom has to reach an agreement with all its creditors by August 27 or face insolvency proceedings.
RCom has agreed to sell its telecom assets including airwaves to Mukesh Ambani led Reliance Jio, aimed at reducing its debt by ₹25,000 crore or by 60%.
