Reliance Communications announces debt recast plan to reduce its Rs45,000 crore debt significantly to less than Rs6000 crore by monetization of its wireless business and real estate assets. Post recast it would emerge as pure enterprise service providers and completely exit B2C telecom services business.
The ambitious plan has been appreciated by the street and the stock has already reacted to the news. Since the company will exit from the ongoing strategic debt restructuring (SDR) programme, the banks will have to classify it as NPA in Q3 FY18E and may have to provide for the exposure. The path would not be so simple and smooth given the scale of debt and number of parties (lenders) involved with divergent interest. However, the stock could further get rerated as the resolution kicks in.
