Economy

RCom bond default hits Anil group stocks

RCom bond default hits Anil group stocks

The lives of thousands of employees of Anil Ambani-owned Reliance Communication are in uncertainty as the company plans to shut down its 2G and 3G wireless operations and voice call services.

The scrip of Reliance Communications slumped 12.12 percent, Reliance Capital tanked 10.21 percent and Reliance Infrastructure plummeted 9.16 percent on BSE. The company will trade real estate and telecom tower businesses to pay off Rs 27,000 Crore out of a debt of Rs 45,000 Crore on its back, RCom claimed to the media in a statement.

"Reliance Communications Ltd., the Indian mobile phone operator controlled by billionaire Anil Ambani, failed to pay a coupon on its 2020 dollar notes before the expiry of a grace period on Monday", Bloomberg reported citing an unidentified person familiar with the matter.

Reliance Naval and Engineering dropped 11.22 per cent at the day's low and ended at Rs 44, while Reliance Nippon Life Asset Management shed 9.23 per cent intraday before recovering a little to end at Rs 256.5.

In intra-day trade, shares of RCom crashed 16.88 percent to hit its 52-week low of Rs 9.60, Reliance Capital plunged 14.99 percent to Rs 400.20. Revenue almost halved to Rs2,667 crore, amid the relentless price war launched by rival Reliance Jio, which is backed by Anil's elder brother Mukesh Ambani. The company is reeling under a debt burden of more than Rs 34,844 crore, and has been in negotiations with the lenders to restructure loans.

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Meanwhile, Bloomberg reported that RCom had also failed on USA dollar bonds - the first default by an Indian company in 15 months.

"The Company has also announced various asset sales and a comprehensive debt resolution plan, as advised per our earlier letter dated 30th October 2017. Accordingly, for the time being, no payment of interest and/or principal is being made to any lenders and/or bondholders of RCom", the firm said.

The company has issued a clarification on report around it is defaulting on payment of a USA dollar bond.

Following Wednesday's carnage, the combined market capitalisation of all Anil Ambani group companies stood at Rs55,790 crore, less than half the debt of Rs1.18 lakh crore at the end of March.


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