From April 1, it would be a restructured company without any legacy and hopefully RCom would be in black by then, said Punit Garg, Executive Director, Reliance Communications.
Reliance Communications was soaring in trade on back of exit from consumer business resulting in sharp drop in loss.
The Indian telecoms carrier reported a narrower quarterly net loss of 1.30 billion rupees ($20.45 million) on Monday.
The current debt stands at Rs 38,000 crore and the sustainable debt in RComm would be Rs 7000 crore, said Punit Garg, Executive Director, Reliance Communications.
He said through the asset monetization programme, Dhirubhai Ambani Knowledge Centre (DAKC) development programme and through proceeds from the stake sale in our global business, we should have a debt of around Rs 7000 crore, which would be a long-term loan of 20 years with low interest rates from April 1, 2018.
So from April 1, it would be a restructured company without any legacy and hopefully RComm would be in black by then.
The sale process is on and will likely be completed by end of February or mid-March as the lenders are running the process and final bids are expected, said Garg.
He said the company plans to develop DAKC into an international Centre or IT Township.
Below is the verbatim transcript of the interview.
Nigel: What is the current debt right now because your interest cost has come down to around Rs 50-52 crore, and that in fact is a much – that is a big reduction compared to what we have seen on a sequential basis as well as on a year-on-year (YoY) basis. Can you elaborate on the same?
A: Interest cost, when you look at it, we have no interest during the period of SDR up to March 31 as it has been approved by the lenders. When you look at the interest cost, it would much be lower because what would be the remaining debt in Reliance Communication, would be Rs 7,000 crore from April 1 2018.
Mangalam: In that case a large part of the numbers improving were also because of your offloading of the consumer business. So in that case if you could tell us the valuation that the resulting enterprising business will be after selling off your consumer telecom business?
A: I would love to give you all the valuation, but you have to wait for that. As you know, the process is going through and we are expecting to finalise that between end of February to mid of March as lenders are running the process on that and the final bids are expected during that period.
Nigel: Any update on that land sell that the street has been waiting for; I am talking about the Dhirubhai Ambani Knowledge Center (DAKC). What can be the value of that particular property?
A: I think as you look at our asset monetisation plan, apart from spectrum, tower, fibre, and Media Convergence Nodes (MCN), for which we concluded deal on December 28, as far as DAKC is concerned, DAKC is going through a development plan where Chinese lenders would be transferring around USD 1.1 billion of their remaining debt in to DAKC. DAKC has been independently valued for the development plan for generating cash NPV of around USD 3 billion or so. So I think DAKC would go into an international financial center or into integrated IT township over there. So that is the current plan for DAKC.
Mangalam: What is your current debt right now and when do you start paying interest?
A: We are sitting on currently at Rs 38,000 crore debt and we are expecting that sustainable debt in Reliance Communication would be Rs 7,000 crore. So through asset monetisation program, DAKC development program, and through the proceeds from stake sale in our global business, or I should say the Global Cloud Xchange (GCX), etc. which is in our holding company, we should be making the remaining debt at Rs 7,000 crore which would be a long term loan of 20 years with low interest rate and that would start from April 1. So, we believe we would be a completely restructured company on April 1 without any legacy and hopefully Reliance Communication would be in black by then.
Nigel: Can you give us a ballpark figure on what will be the value of the spectrum, the tower, fibre, as well as the telecom infrastructure that will be sold?A: I think we announced that, because of the confidentiality we could not announce earlier the exact number, but I think everyone was around that number, everyone has figured out in industry, so, I would not say what the exact number is. However, I think what you should know is that our net debt in the company would come down to Rs 7,000 crore from April 1 and I think that itself is an indicator that sum total of DAKC development and the asset monetisation program would take us there.