The lenders of Reliance Communications (RCOM) has given seven months time till December 2017 to complete the strategic transactions and reduce its debt by a substantial amount of Rs. 25,000 crore or 60% of its total debt.
The company is expeditiously closing the already announced strategic transactions with Aircel and Brookfield, to immediately reduce debt from Rs. 45,000 crore to approx. Rs. 20,000 crore; a reduction of 60% or Rs. 25,000 crore.
Based on applicable guidelines, the lenders have today constituted a Joint Lenders’ Forum (JLF) to consider and approve the company’s plans in this regard.
RCOM will also present to the lenders its sustainable long term plans for servicing the remaining debt of Rs 20,000 crore. As part of the above, there will be a standstill on the company’s debt servicing obligations for the next 7 months till end December, 2017.
In the event the transactions are not completed in the above timeframe, the lenders may exercise their right to convert their debt, in accordance with applicable SDR guidelines.