India’s Reliance Communications skips bond interest payment
The troubled telco did not pay interest of about US$ 9.75 million due on Monday. This is the first time it has missed payment on a note in US currency
The Indian telecommunication sector underwent a major disruption after the entry of Reliance Jio Infocomm, owned by India’s richest man Mukesh Ambani, but ironically one of the worst hit was Reliance Communications, owned by his younger brother Anil Ambani.
The beleaguered telecom company has now skipped interest payment to its bond holders. It did not pay the interest of about US$ 9.75 million due on Monday on its US$ 300-million bonds that will mature in 2020. This is the company’s first missed interest payment on a note in US currency, reports Bloomberg.
Reliance Communications owes Rs 450 billion (US$ 6.94 billion) to various lenders and is in the process of shutting down the bulk of its wireless telephony business.
The company is also seeking to convert a part of its debt to equity under a ‘zero write-off’ plan. It has also entered into a standstill agreement with lenders till December 2018.
Reliance Communications had earlier tried to merge with Aircel, another troubled telco, but had to call it off in October citing legal and regulatory uncertainties.
Reliance Communications has a customer base of about 75 million and holds 122.4 GHz worth of spectrum across 800, 900, 1800 and 2100 MHz bands.