Priority is to resolve ₹44,000 crore debt, says chairman Anil Ambani; realty to be ‘engine of growth’
Reliance Group will exit the telecommunications business all together and will instead focus on real estate assets development, valued at ₹25,000 crore, chairman Anil Ambani said on Tuesday.
The first priority for RCom, which is credited with ‘democratising’ telecom services through cheaper offers in early 2000s, is to resolve its debt worth over ₹40,000 crore, he told shareholders at the company’s 14th AGM.
Saddled with over ₹44,000 crore debt, RCom received the approval of the group of 38 lenders, including Chinese banks, to sell airwaves, mobile, towers and optic fibre to Mukesh Ambani’s Reliance Jio, a move that will reduce company’s debt by ₹25,000 crore.
“We have decided that we will not proceed in this sector. And many other companies have taken a similar call. This is very much a writing on the wall, the future… As we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business. Reliance Realty will be the engine of growth for the future of this company,” Mr. Anil Ambani said.
Shailesh Mehta, a shareholder, held Mr. Anil Ambani responsible for the poor state of RCom and the telecom sector.
“RCom has debt of over ₹44,000 crore and even after asset sale, the bankers will have to take haircuts of ₹20,000 crore. You have ended the non-compete clause with Mukesh Ambani in 2010 and that has taken a toll on the company and RCom is on the verge of getting a defaulter tag,” he said.
‘Withdraw Dassault JV’
Mr. Mehta also requested Mr. Anil Ambani to withdraw the joint venture with Dassault Aviation for the controversial Rafale jets.
Responding to Mr. Mehta, Mr. Anil Ambani said, “It’s unprecedented in Indian corporate history that we are fully committed to resolution for all the lenders, Indian or foreign and bondholders. Even the Chinese banks are supportive of the resolution. I am personally committed to give them the best resolution possible.”
Talking about the realty business, Mr. Anil Ambani said that RCom was planning to commercially develop Dhirubhai Ambani Knowledge City (DAKC), a 133-acre registered IT park in Navi Mumbai, to create 30 million sq. ft. of commercial space, which would be valued at over ₹25,000 crore by conservative estimates.
“It will be 75 times the existing Nariman Point complex in South Mumbai and 10 times larger than the Bandra- Kurla Complex,” Mr. Anil Ambani said.
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