Shares of India's largest telecommunication service provider Reliance Communications Ltd experienced a crash down over 48% in morning trade. After almost one-and-a-half years of unsuccessful attempts to revive the firm through selling assets for paying back its lenders, the company decided to opt for insolvency proceedings.
As of March 2017, RCom's net debt stood at around $7 billion in its last number public.
As per the morning report of 4th February 2019, RCom fell as much as 48.27% on BSE to Rs 6 a share Intraday. At 9.40 am, the stock was trading at Rs.7.34 on BSE, down 36.7% from its previous close. In comparison, benchmark Sensex fell 0.23% to 36,386.78 points. (source: indiainfoline.com).
RCom said, “Lack of 100 percent approval and consensus, as mandated by the RBI’s February 12, 2018, circular, on all important issues, among over 40 lenders, Indian and foreign despite the passage of 12 months and over 45 meetings. Further, the pendency of numerous legal issues in high courts, the TDSAT (Telecom Disputes Settlement and Appellate Tribunal) and the Supreme Court impeding progress at various stages has also kept the issue on hold,”
However, the company said that it has come up with plans to sell assets worth about Rs.250 crore to clear debt of around 40 lenders. Further through the sale of the spectrum the company is expecting to make Rs.975 crore. This is planned to settle dues of Rs.550 crore to Ericsson and Rs.230 crore to settle dues of minority stakeholder Reliance Infratel.