Reliance Communication shares surge, up 19%
Anil Ambani, chairman of RCom, is likely to make important announcement that may include companys debt recast plan.
Share price of Reliance Communication on Tuesday surged as much as 19% ahead of the company's media briefing.
After touching day's high of Rs 19.45 per piece, RCom at 1335 hours was trading at Rs 18.53 per piece higher by 13.61% on the BSE.
The company is likely to hold a media briefing to make important announcements, said an ET now report.
It may be noted that RCom is likely to talk over its debt recast plan in this briefing.
Problems of Anil Ambani's RCom this year has further aggravated as two of its major deals were called off, and the company needs to come with newer plans to manage its debt.
RCom reportedly hopes to recover 60% of its total debt from two mergers namely with Aircel and Brookfield Infrastructure.
Earlier, Anil Ambani stated that both the deals will complete by September 30, 2017 and Rs 25,000 crore proceeds will be used to pay lenders. However, in the month of October, both Aircel and Brookfield withdrew the schemes of arrangement in regards to demerger of wireless division of Rcom.
RCom's debt has now risen to Rs 45,000 crore by end of September 2017, compared to Rs 44,000 crore in the June quarter. Of this, Rs 25,000 crore is domestic debt and the remaining Rs 20,000 crore is in the form of foreign loans and bonds. Further, RCom has classified Rs 22,550 crore of borrowings as non-current liabilities.
Due to higher debt, analysts have withdrawn their ratings on the company. Recently, Fitch Ratings stated that it has chosen to withdraw the ratings on Rcom for commercial reasons.
Accordingly, Fitch will no longer provide ratings or analytical coverage for RCom. Moody's Investor Services also took the similar action.
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