The Reliance Communication stock was under pressure after the company called off its proposed merger with Aircel.
Sharing the rationale behind calling off the deal, Punit Garg, ED, Reliance Communication said the merger was simple but started becoming very complex. There were many unidentified flying objects with respect to Aircel deal, he said.
According to him, in June they were anticipating to close the deal before the end of this year but then legal complications started with a PIL before Supreme Court in 2017. Issues came up from unsecured lenders like GTL, CNIL and Bharti Infratel, said Garg.
Moreover, Department of Telecom (DoT) also wanted Aircel to seek clarification from Supreme Court.
However, he is hopeful of completing the merger with Sistema Shyam Teleservices Ltd (SSTL) by this month on back of DoT's nod for SSTL deal expected by next week.
Talking about debt, he said their current debt stands at Rs 45,000 crore – the Indian lenders are at Rs 19000 crore and foreign lenders and bond holders together are at Rs 19000 crore, and rest is promoters and group companies' contribution.
The company had earlier said that they aim to pare 60 percent of their debt but December 2017. The company plans monetize tower, fiber, real estate assets with an aim to reduce debt. They also plan to optimise spectrum portfolio, said Garg.
He said the endeavour remains to pare the debt by December end but by March 2018, the company would focus to reduce Rs 25,000 core out of the overall debt.
He said, “The most important point is that company in its AGM on September 26, has passed the resolution and enabled the lender if they want to exercise, they can exercise the right to convert debt into equity. The decision is with lenders for the timing, which will run through the process. We are fully compliant with SDR guideline and regulation.”