Troubled Indian operator aims to repay INR250 billion by end of September.
Reliance Communications (RCom) late last week revealed that its lenders have agreed to give it until December to meet its debt repayment obligations.
The deal eases the pressure on the Indian operator, which is struggling to fight a fierce price war sparked by disruptive newcomer Reliance Jio Infocomm.
To help pay down its hefty net debt, which stands at around 443.45 billion rupees (€6.12 billion), RCom is in the midst of divesting its mobile arm and merging it with Aircel. It aims to complete the deal in June, subject to approval from the Department of Telecommunication (DoT). It has also agreed to sell a majority stake in its towers business to Brookfield Infrastructure Group.
These transactions will enable it to repay INR250 billion, reducing its net debt to around INR200 billion.
"The lenders have taken note of the advanced stage of implementation of RCom’s strategic transformation programme," RCom said in a statement on Friday. "The lenders have proposed to give time of seven months till December 2017 to complete the above transactions."
The deal helps RCom steady the ship after a rocky week.
The company set alarm bells ringing when it posted its first ever full year net loss. No fewer than four credit rating agencies, including Fitch and Moody’s, subsequently downgraded the operator.
As well as striking a deal with lenders, RCom has also called for government intervention to reverse the ailing fortunes of India’s mobile market.
Co-CEO Gurdeep Singh called for interconnection charges to be scrapped in order to reflect the industry’s shift away from per-minute/GB-based pricing. He also called on the government to change the way it calculates gross revenue, thereby lowering licence fees and spectrum usage charges.