22 March 2018
| Alan Burkitt-Gray
India’s Reliance Communications has come a step closer to selling off its mobile business to rival operator Reliance Jio following a bondholders’ vote.
Holders of $300 million worth of bonds voted 81% in favour
of selling its wireless business along with its spectrum,
towers, fibre and media convergence node assets.
The deal between Reliance Communications (RCom) and the
unrelated company, Reliance Jio, was announced at the end of
December, but needed approval from bondholders before it could
RCom will now focus on its enterprise business in India and
Global Cloud Xchange (GCX), its international carrier
RCom and Reliance Jio are unconnected except that the companies
are run by rival brothers, members of the Ambani family.
It was the second time RCom had tried to get
bondholders’ approval. At the first meeting, on 6
March, the meeting was adjourned as it was inquorate. This
week, however, enough bondholders turned up at the resumed
meeting, in London.
RCom’s asset monetisation plan will cut its debt
and liabilities by about $3.8 billion. It has set up a special
purpose vehicle that holds 125 acres of prime real estate at
Dhirubhai Ambani Knowledge City in Mumbai, with approximately
20 million square feet of development potential.
At the same time RCom is in discussions with an unnamed "global
strategic partner for a further debt reduction which will occur
upon a stake sale process that is already underway".
At the end of the process, RCom hopes its residual debt will be
almost $1.1 billion.
But there are still many steps to take: RCom offers a timetable
with dates through to the end of August 2018 at least.
Global Cloud Xchange,