Reliance Communications shares plunge over 13%

A man opens the shutter of a shop painted with an advertisement of Reliance Communications in Mumbai, India, November 3, 2015. REUTERS/Shailesh Andrade/File Photo

Reliance Communications posted its fourth consecutive quarterly loss and said it did not pay interest on some obligations, prompting the company’s debt-laden shares to fall 14 percent to an all-time low and their bonds fell on Monday.

The telecom operator controlled by Anil Ambani reported late Saturday a quarterly loss of Rs 2,709 crore ($ 414.06 million), compared to a gain of Rs. 62 million rupees a year ago. Revenues almost halved to Rs 2,667 crore, in the midst of a price war started by his upstart rival Reliance Jio, which is backed by Anil’s older brother, Mukesh Ambani.

RCom, as the company is widely known, also said in a securities presentation over the weekend that it has lost interest payments on two outstanding domestic non-convertible bonds.

The loss and late payments make the recovery of RCom much more difficult and came at a time when there are doubts about a previously marked debt restructuring plan. With a net debt of Rs. 44.3 billion rupees at the end of March, RCom is the most leveraged among listed Indian telecommunications companies.

After its previous plan to reduce debt by selling towers to Canada’s Brookfield and merging its wireless business unit with rival Aircel collapsed, RCom devised a new plan last month to repay a total of Rs 27 billion for new offers for its towers and infrastructure. assets and real estate.
He has not yet finalized the buyers of any of the assets he plans to sell.

As part of the latest plan, the company has said that banks will convert approximately Rs 7 billion of their debt into equity under the central bank’s strategic debt restructuring plan.

However, the debt-equity conversion plan could have problems, as bankers and the RCom disagree over the treatment of the loans that RCom has taken from the companies in its group, the Economic Times reported Sunday.

The company declined to comment on that story, but noted the comments of its Executive Director, Punit Garg, who in late October said he was confident that the strategic plan for debt restructuring would be carried out.

As part of the agreement with the banks, RCom says it has obtained a deferment in payments to lenders until December 2018.

The company’s shares fell to 14.2 percent on Monday and fell 11.4 percent at 0750 GMT.

Its overseas bonds also fell on Monday, with RCom’s 6.5 percent bonds maturing in 2020 at 35/37 cents on the dollar. The bonds have tended to decrease sharply in the last six weeks as RCom’s problems have increased.