RCom plans to issue shares to lenders in lieu of debt

New Delhi: Telecom operator Reliance Communications, which is reeling under debt of about Rs 45,000 crore, plans to issue shares to lenders for the debt that it has raised from them, as per a regulatory filing of the company.

The board of RCom is scheduled to meet on August 12 which will consider convening annual general meeting of shareholders to enable the firm seek their nod for converting debt into equity shares.

In a regulatory filing,, RCom said that the board will consider and approve matters related to merger scheme between the company and Aircel along with other deleveraging measures.

The board will in the same meeting will consider "approving notice convening annual general meeting seeking shareholders' enabling approval for various items including conversion of debt into equity shares, if and when required, for issue of privately placed non-convertible debentures/ other debt securities".

The RCom board will also consider update on the ongoing strategic debt restructuring scheme of the company.

The company has defaulted on some of the payments to lenders and it has received time till December for strategic restructuring plan under which it will get a seven-month standstill to service loans amounting to Rs 45,000 crore.

Anil Ambani-led RCom has earlier blamed "freebies" offered by a new telecom operator -- an apparent reference Reliance Jio run by his elder brother Mukesh Ambani-- for woes of the sector even as it has denied having delayed any payment of debt by more than three months from the due dates.

The company has announced sale of mobile towers to Brookfield Infrastructure and combination of its wireless business with Aircel group which, on completion of the deal, will reduce existing debt by up to Rs 25,000 crore.

Shares of RCom closed at Rs 22.3 a unit, down by 2.62 per cent compared to previous close, at the BSE today.