RCOM bondholders approve asset monetisation to Jio

The bondholders of the RCOM’s $300 million bonds at their meeting held at London has approved with overwhelming majority the sale of assets to Reliance Jio Infocomm and also monetization of other real estate assets.

The bond holders also approved release of their security on the company’s assets and to accept part prepayment of their outstanding bonds.

In conjunction with the approved resolutions, further modifications have been reflected in the First Supplemental Trust Deed by the Trustee, as permitted under the Trust Deed, which provide additional protections deemed not to be materially prejudicial to the interests of noteholders.

That release of any collateral under the notes will be conditional upon receipt of 90% of the consideration payable with respect to such collateral pursuant to the Reliance Jio Sales.

Milestones relating to the redemption of the Notes with the proceeds of the Reliance Jio Sale in accordance with the terms outlined in the Second Extraordinary Resolution as follows:

First partial redemption to occur no later than 15 June 2018 and Second partial redemption to occur no later than the earlier of (i) seven business days from the grant of the Spectrum Contiguity Matter Relief; and (ii) 30 June 2018; and third partial redemption to occur no later than seven business days following the Escrow Hold Back Date.

The Group’s asset monetization plan, comprised of the sale of its spectrum, tower, fibre, telecommunications infrastructure and select real estate assets is required to close by 31 March 2018, subject to obtaining certain lender consents and regulatory approvals.

Following the completion of the asset monetization plan, the debt and liabilities of the Company will be reduced by approximately 250,000 million Rupees ($3,852 million).

A special purpose vehicle holding 125 acres of prime real estate at Dhirubhai Ambani Knowledge City, Navi Mumbai, with approximately 20 million square feet of development potential is expected to assume non-recourse long-term debt financing of up to 70,000 million Rupees (US$1,079 million).

The company is also in discussions with a global strategic partner for a further debt reduction which will occur upon a stake sale process that is already underway. To bridge the successful completion of the stake sale, the company is considering two instruments that would have a de minimis interest rate.

The majority of said instruments would have a long-dated maturity and be repaid upon the completion of various milestones, including the ongoing stake sale; whereas the remaining instruments would include a conversion feature within a shorter stipulated timeframe. The company’s final residual financial debt is expected to be up to 70,000 million Rupees ($1,079 million) upon completion of all transactions.

The relevant terms of the reinstated bank lenders’ debt in the company is expected to include a maturity extension and an interest rate between 6 to 10%. The relevant terms of the debt assumed by Dhirubhai Ambani Knowledge City, Navi Mumbai is expected to include a maturity extension and an interest rate between 2 to 5%. Both facilities are anticipated to have a back-ended amortization profile.

The combination of the above transactions will lead to a 85% reduction in the group’s total debt and liabilities.

The Group’s continuing operations will comprise stable and profitable B2B focused business segments, including Indian and Global Enterprise, Indian Data Centres and one of the largest private submarine cable networks in the world.

It is anticipated that, between fiscal year end 2018 and 2022, the continuing business will generate total revenues of approximately 54,000 million and 68,000 million Rupees ($832 million and $1,048 million) per annum and EBITDA of between 11,200 million and 15,000 million Rupees ($173 million and $231 million) per annum, with a spend of between 1,530 million and 3,450 million Rupees ($24 million and $53 million) per annum on capital expenditures.


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