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Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
ASIA CREDIT RESEARCH
Anjali Agarwal India Credit Research Manager - Debtwire Asia [email protected]
Dominic Soon Senior Analyst - Debtwire Asia [email protected]
Ryan Patwell Head of Research - Debtwire Asia [email protected]
Reliance Communications’ (RCom) has finally given up on its 15-month battle to keep itself and core Indian subsidiaries Reliance Infratel (RITL) and Reliance Telecom (RTL) outside of bankruptcy. After the Anil Ambani-controlled wireless-communications, data-centre and undersea-cable operator decided it was better served seeking salvation through formal proceedings, the Mumbai National Company Law Tribunal (NCLT) ordered the resumption of its corporate insolvency resolution process (CIRP) on 7 May.
RCom withdraw its appeal against the initial 15 May 2018 bankruptcy order a few days after India’s Supreme Court 26 January decision narrowing the interpretation of an ineligible bidder for a bankrupted company. The ruling, which clarified the definition of ineligible related parties, potentially allows Anil’s elder brother, Mukesh Ambani, the billionaire promoter of wireless communications provider Reliance Jio Infocomm (Jio), to pitch a resolution plan for RCom, according to Debtwire’s legal analyst Ashley Bell. The brothers had previously inked two out-of-court deals in December 2017 and August 2018 in which RCom was to sell the majority of its assets to Jio. But both were terminated in March 2019 —leading to the bankruptcy—in part because of RCom’s inability to win approval from financial and operational creditors.
With aspects of India’s two-year-old Insolvency & Bankruptcy Code (IBC) still to be ironed out, RCom’s path through a Corporate Insolvency Resolution Process (CIRP) will likely be litigated on a host of
issues, which could delay a resolution for quite some time and impede the recovery predictability. While Essar Steel India’s ongoing two-year process might be the most egregious example of what happens once the litigation begins, there have been numerous other cases dragged on by appeals and counter appeals all the way to the Supreme Court.
Some points that will likely need to be cleared up are: (1) the date of admission; (2) whether certain transaction should be clawed back as preferential; (3) the treatment of priority claims among secured lenders; (4) the treatment of claims by the Department of Telecommunications (DOT), a vital operational creditor; and (5) whether the insolvency proceedings of the three entities could be streamlined into a single process.
Without those issues being resolved, it is nearly impossible to ascertain what the actual recovery levels might be. While the market price for RCom’s due-November 2020 bonds are indicated in the 25 cents neighbourhood, we set out scenarios later in this report with recoveries estimated at 23-79 cents(1). The recent redistribution order in the Essar Steel India case as well as the only 15% to 20% recovery for creditors of RCom rival Aircel Ltd(2) only adds to pessimism.
SUMMARY CONSOLIDATED CAPITAL STRUCTURE (INRbn) AS OF 31 MARCH 2018
Instrument Issue Date Interest rate Maturity Outstanding
(INRbn) Outstanding
(USDm)(1) Leverage
Rupee Term loans from banks and others 2.67% - 16.45% 2017 - 2022 beyond 134 2,057
INR 30bn 11.20% Non-Convertible Debenture 02-Mar-09 11.20% 01-Mar-19 30 461
INR 15bn 11.25% Non-Convertible Debenture 07-Feb-12 11.25% 07-Feb-19 8 115
Foreign Currency loans from banks 2.67% - 16.45% 2017-2022 143 2,205
USD 300m 6.5% Senior Secured Notes 06-May-15 6.50% 06-Nov-20 19 297
Total secured debt 334 5,135 37.2x
Rupee Term loans from banks and others 11.70% <1 year 118 1,817
Foreign currency loans 5.44% <1 year 3 41
Deferred liabilities of spectrum 10.00% <1 year 67 1,030
Total debt for RCom (excl. GCX) 522 8,023 58.1x
GCX's USD 350m 7% Senior Secured notes 01-Aug-14 7.00% 01-Aug-19 23 349
Total debt for RCom (incl. GCX) 545 8,372 60.6x
Cash and cash equivalents 6 94
Net debt 539 8,278 59.9x
Market capitalisation 5 76
Enterprise Value 544 8,354
Adjusted EBITDA (FY18) 9 EV/EBITDA 60.5x
Source: Debtwire, company reports, (1) INR / USD 0.01537 as of 31 March 2018, sourced from Oanda.com
POTENTIAL BIDDERS
Bharti Airtel Ltd
Bharti Infratel Ltd
Brookfield Asset Management Inc.
Reliance Jio Infocomm Ltd
Sistema JSFC
Source: Debtwire, Business Standard, Economic Times
DEBTOR SUMMARY
Promoter Anil Ambani & family
Sector Telecom
Total debt (FY18) INR 544bn (USD 8.4bn)
FY18 EBITDA INR 9bn
Leverage (FY18) 60.5x
Source: Debtwire, Company filings
1) Assuming pari passu distribution with other secured lenders, with the variance largely depending on the estimated values of RCOM's spectrum and Dhirubhai Ambani Knowledge City (DAKC), a 125 acre leasehold land plot in Navi Mumbai.
2) As reported by the Economic Times on 18 May.
Page 2
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
What will happen to recent payments/transactions?
RCom's resolution professional (RP) will have unilateral discretion to determine which transactions warrant him seeking approval from the NCLT to unwind as preferential. Under IBC sections 43 and 45, the RP can scrutinise preferential payments made to creditors and the sales of assets to third parties done within one year before admittance and sales to a related parties within two years.
As such, the NCLT recognised admittance date could be important. According to an 8 May public announcement in the Business Standard newspaper posted on Rcom’s website, the bankruptcy admittance date is 15 May 2018. However, given the 11 month stay on proceedings between 30 May 2018 to 30 April 2019, that date is likely to be contested because it could significantly impact whether the RP should seek to clawback a USD 200m payment in December 2017 to a China Development Bank (CDB)-led lender syndicate in exchange for their withdrawal of a bankruptcy application.
Regardless of whether the start date is reset to 7 May 2019, the INR 5.8bn (USD 83.1m) settlement payment to trade creditor
NCLT CASE DETAILS
Respondent Reliance Communications Ltd, Reliance Telecom Ltd, Reliance Infratel Ltd
Petitioner Ericsson India Pvt Ltd
Default Amount (as per NCLT order) INR 9.79bn
Date of Petition 13-Sep-2017
Original Date of Acceptance Into Bankruptcy 15-May-2018
NCLAT stay on insolvency process 30-May-2018
Resumption of Insolvency Proceedings(1) 7-May-2019
Initial Deadline for Plan (180 days) 3-Nov-2019
Possible Extended Deadline for Plan (270 days) 1-Feb-2020
Court Mumbai bench
Judge B.S.V. Prakash Kumar
Original Interim Resolution Professional Pradeep Kumar Sethi (RBSA Advisors)
SBI Nominated Resolution Professional Anish Nairanjan Nanavaty (Deloitte Touche Tohmatsu)
Settlement to Ericsson in March 2019 upon Supreme Court order INR 5.8bn including late payment interest (~56 cents(2))
LEGAL AND FINANCIAL ADVISORS
Lender counsel AZB & Partners, Anil Kher and Co, Trilegal, S&R Associates
State Bank of India Counsel J Sagar Associates (as of May 2018)
Petitioner Counsel Ashwin Ankhad & Associates (as of May 2018)
RCom Counsel Naik Naik & Co (as of May 2018)
First-Lien Bondholder Varde Investment Partners LP
First-Lien Bondholders Counsel Kirkland & Ellis LLP
Financial Advisor Credit Suisse
GCX BOND ADVISORS Counsel Paul Hastings LLP
First Lien Bondholders Bardin Hill Investment Partners LP, Blenheim Capital Partners, Varde Investment Partners LP
First Lien Bondholders Counsel Goldman Sachs & Co. LLC, White & Case LLP
Financial Advisor Lazard
Source: Debtwire, company filings, court documents The date of resumption of proceedings is not the date of admission. (1) Settlement amount of INR 5.5bn without interest divided by INR 9.8bn due to Ericsson as of 31 March 2017.
Ericsson India in March 2019 and the August 2018 sales of media convergence nodes (MCN) and fibre assets to Jio could also be deemed preferential.
The Ericsson settlement payment is likely to come under scrutiny even though it was prompted by a Supreme Court directive. National Company Law Appellate Tribunal Chairperson S.J. Mukhopadhaya observed during an 8 April hearing that the payment is liable to be reversed under IBC Section 43, according to a Business Standard report dated 9 April. If the RP chooses to contest the payment, the court will need to establish whether a Supreme Court directive supersedes the IBC, as per a Debtwire report in May.
While Jio’s purchase of RCom’s MCN assets could potentially be classified as an undervalued transaction under Section 45 of the IBC, we do not believe that this transaction will be disputed. Debtwire reported in October 2018 that INR 7.74bn of the INR 12bn received from the sale was used to reinstate bank guarantees with the DOT, protecting the validity of RCom’s spectrum licenses. As creditors would likely be much worse off were the spectrum licenses forfeited, it would not make much sense for them to try and claw back these payments.
How will varied secured priority claims be treated? Disagreements between creditors of RCom, RITL and RTL over the distribution of proceeds from the now-defunct Jio asset sale agreement signed in December 2017 began shortly after the ink dried. RITL offshore secured lenders — Standard Chartered Bank, Emirates NBD, VTB Capital, Industrial and Commercial Bank of China and Doha Bank — maintained that proceeds from the sale of tower assets should be used first to pay down their claims as they contend that they have a prepayment clause covering asset sales in their loan agreements. State Bank of India and other domestic creditors then pressed their own priority claims even though all RCom’s assets are included in a common security pool for all its secured creditors. An attempt to arbitrate the matter ran aground because some creditors refused to concede to the process.
A bankruptcy proceeding won’t ameliorate the disagreement. In CIRP, it is the financial creditors themselves, in negotiations with the white knight, that determines how to apportion the settlement proceeds. The RP’s role is simply to verify claims as either secured and unsecured, but not to differentiate among ranks of secured financial claims nor asset charges, according to IBC Section 18. Given the existing dispute between creditors, the distribution levels will likely be litigated.
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Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
Perhaps by the time the RCom creditors make their cases, the Supreme Court will have already set a precedent with Essar Steel India. The NCLAT’s directives on Essar Steel as well in the case of iron ore miner Orissa Manganese & Minerals seem to favour equal distribution for all secured creditors. However, that seems to go against the spirit of a 24 January 2019 Supreme Court ruling regarding the Swiss Ribbons insolvency, which stated "all creditors do not need to be treated identically, but in a manner that reflects the different bargains they struck with the debtor."
Can the three bankruptcies be merged? While group insolvency is under consideration, the law currently dictates that RCom and its two main units undergo separate proceedings even though their Committee of Creditors (COC) might be substantially similar. In the Videocon Industries case, separate insolvency applications against the company were transferred to a single bench. In the meantime, the NCLT has yet to rule on the petition from Videocon lead creditor, State Bank of India, to have prospective bidders submit a common resolution plan for all 14 Videocon group entities, as per a 15 March report from The Economic Times.
Cancellation of spectrum licenses could be black swan event significantly reducing RCom asset values(1). In order to avoid losing spectrum licenses, potential resolution plans may require that a significant payment be made to the DOT to settle any outstanding liabilities, although it’s not yet clear how much that would require. While DOT claims will be classified as operational dues and the CIRP framework does not give any voting rights to the trade creditors, the COC will not want to antagonise the DOT to the point it cancels spectrum licenses. The telecommunications regulator has made its voice heard in the past, threatening in July 2018 to cancel spectrum licenses and to block third-party sales of spectrum if bank guarantees were not provided.
There is already a precedent of a ministry canceling a bankrupted debtor’s license. India's Ministry of Coal terminated a coal-mine development and production agreement it had with Monnet Ispat & Energy after the steel producer was admitted into insolvency. The NCLAT in November 2018 rejected Monnet RP’s challenge that the termination violated the IBC moratorium provision.
Recovery. With RCom re-admitted into a CIRP process, all existing agreements with lenders will be scrapped and the process will follow IBC guidelines. This includes the exchange offer holders of USD 300m due-
November 2020 bonds approved in August 2018. We outline three recovery scenarios, which provide 23-79 cent recoveries on a discounted basis. While the range is mostly much higher than the ~25-cent indicated trading levels for RCom’s secured bonds and loans, we think that market participants are taking a cautious approach to the valuations following NCLAT’s redistribution order in the Essar Steel case; the limited visibility on RCom’s spectrum liabilities; and the value of Dhirubhai Ambani Knowledge City (DAKC), RCom’s 125 acre plot in Navi Mumbai.
As reported by Debtwire in March 2019, some market participants were discounting Essar Steel loans by 20 points following the NCLAT decision. The recovery amounts below are calculated using RCom’s consolidated assets divided by its consolidated secured debt, and assumes that all secured financial creditors receive equal distribution from all assets across the group. This could significantly change depending on how the previous series of questions get answered.
Blue-sky scenario. Debtwire estimates that the recovery on the due-November 2020 bonds and secured loans will be ~79 cents. Key assumptions:
● Spectrum licenses are valued by taking end-March 2018 book value, less two years of amortisation (using the average level of amortization for FY17 and FY18) and then reducing the balance by the INR 67bn of spectrum liabilities on the balance sheet as of March 2018.
● DAKC land valued at INR 100bn, per company disclosure on 26 December 2017.
● Restructuring process to take two years and the distribution is discounted to present value at 8%, a slight premium to the current yield on the JP Morgan Corporate Non-Investment Grade index.
Base case scenario. We estimate that the recovery could be ~43 cents. Key assumptions:
● Spectrum value calculated based on the reserve prices from the latest Telecom Regulatory Authority of India recommendations on auction of spectrum dated 1 August 2018 and remaining life. RCom’s spectrum holdings were derived from page 115 of the due-November 2020 bond prospectus adjusted for 30MHz acquired from Sistema Shyam Teleservices Limited on 31 October 2017, assumed 50% split of the 800MHz band with Jio from the spectrum sharing agreement signed on 18 January 2016, and return to the DOT of some of the 1800MHz band in June 2018.
● DAKC land valuation of INR 66bn, which is the book value of leasehold land, free-hold land and buildings not held for sale on the company’s balance sheet as of 31 March 2018.
● Restructuring process to take three years and the distribution discounted to present value at ~15%. Notably, the Essar Steel NCLT process has been ongoing for nearly two years with no clear end point.
Bear case scenario. We estimate that the recovery could be ~23 cents. Key assumptions:
● No value for spectrum as DOT acts on its threat to cancel RCom’s spectrum licenses.
● GCX equity stake to have no value, with GCX bondholders potentially being new holders of that entity’s equity.
● DAKC land valuation of INR 20bn in line with transaction by Diligent Media Corporation (part of Essel Group) to sell leased land in Navi Mumbai at INR 0.16 per acre in February 2019.
● Restructuring process to take three years and the distribution is discounted to present value at ~15%.
1) Due to insufficient public disclosure, we are unable to determine the value of spectrum that is at risk of can-cellation. RCom reported INR 67bn in spectrum liabili-ties as of 31 March 2018.
Page 4
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
RECOVERY ANALYSIS
INR bn USD m
Asset Holding
company Low Base High Low Base High Notes
Spectrum assets RCom & Reliance
Telecom Ltd 0 100 146 0 1,542 2,243
High case is book value of spectrum as of 31-Mar-18 amortised 2 years at average of FY17 and FY18 amortization rate; base case estimates spectrum
value based on reserve price recommendations by TRAI on 1-Aug-18 and remaining life. Low case assume that DOT takes back all the spectrum.
(-) Deferred spectrum liabilities
0 -67 -67 0 -1,030 -1,030
Net spectrum value - 33 79 - 512 1,213
Tower assets Reliance
Infratel Ltd 40 45 50 615 692 768
High case calculated based on combined value of towers and fibre of INR 80bn, according to 29 May 2018 press release. Base and low case
are 90% and 80% of high case.
Fibre optic cable, India Reliance
Infratel Ltd 24 27 30 369 415 461
High value per company press release on 27 August 2018 press release. Base and low case are 90% and 80% of high case.
Media Convergence Nodes Reliance
Infratel Ltd 16 18 20 246 277 307
High value per company press release on 23 August 2018 press release. Base and low case are 90% and 80% of high case.
Internet data centers Global IDC
& RCom 7 8 8 104 117 130
Per GCX financial statements as of 31-Mar-18, GCX had signed a binding agreement to acquire the 9 data centers for USD 130m fair value.
Base and low case are 90% and 80% of high case.
Delhi and Chennai real estate
8 8 8 123 123 123 Given as per the NCLT admission order 17 May 2018
Dhirubhai Ambani Knowledge City (DAKC)
20 66 100 307 1,009 1,537
High case per press release dated 26 December 2017 stating that SPV hold-ing the project will assume non-recourse long term debt of INR 100bn; base case was book value of leasehold land as of 31-Mar-18; low case
same as Essel Group transaction at INR 0.16/acre
Equity value of Global Cloud Xchange Limited
0 13 13 0 204 204
Pacnet sold to Telstra at ~6.3x trailing EBITDA in 2015. Using similar multiple on GCX's cash EBITDA of ~USD 90m (Debtwire 6-Mar-19),
EV estimate is USD 567m. Equity value calculated after taking out USD 350m GCX bonds and USD 12.7m SCB loan at holdco pledged against GCX shares.
Total asset value 115 218 309 1,764 3,349 4,744
Total secured debt 334 334 334 5,134 5,134 5,134
Undiscounted secured recovery
34% 65% 92% Pari passu recovery
Discount period (years) 3 3 2 Time it takes for resolution / payoff
Discount rate 15% 15% 8%
Discounted secured recovery
23% 43% 79%
Source: Debtwire, company filings . Note: As of 31 March 2018, RCom and RTL had INR 145bn and INR 34bn book value of telecom license assets
Page 5
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
SPECTRUM HOLDING
Spectrum by circle 800-850 MHz 900 MHz 1800 MHz 2100 MHz Total
Delhi 8.8 - - 5.0 13.8
Mumbai 5.0 - 0.6 5.0 10.6
Kolkota 10.0 - - 5.0 15.0
Andhra Pradesh 5.0 - - - 5.0
Gujurat 6.3 - - - 6.3
Karnataka 8.8 - 0.6 - 9.4
Maharastra 5.0 - - - 5.0
Tamil Nadu 8.8 - - - 8.8
Haryana 5.0 - 0.6 - 5.6
Kerala 8.8 - - - 8.8
Madhya Pradesh 5.0 5.0 - 5.0 15.0
Punjab 6.3 - 0.6 5.0 11.9
Rajasthan 3.8 - - 5.0 8.8
Uttar Pradesh East 5.0 - - - 5.0
Uttar Pradesh West 10.0 - - - 10.0
West Bengal 8.8 - - 5.0 13.8
Assam 5.0 - - 5.0 10.0
Bihar 5.0 - - 5.0 10.0
Himachal Pradesh 5.0 5.0 - 5.0 15.0
Jammu & Kashmir 5.0 - 5.0 5.0 15.0
North East 5.0 - 5.0 5.0 15.0
Odisha 5.0 - 5.0 5.0 15.0
Total 140.0 10.0 17.4 65.0 232.4
Source: Debtwire, company filings, Department of Telecommunications Note: As per company’s 1 October 2017 announcement, RCom has 200 MHz of spectrum across 800/900/1800/2100 MHz bands and additional 30 MHz of 800-850 MHz band acquired through Sistema Shyam Teleservices Ltd in November 2017.
OUTLINE OF CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016
Unlike insolvency processes in the US or UK, the Indian CIRP is effectively a sale process whereby the debtor is sold to the highest third-party bidder subject to the approval of the financial creditors and sanctioning by the NCLT. If a sale agreement cannot be reached within the stipulated time, a liquidator will be appointed to sell the assets of the business. Accordingly, a CIRP should follow the following steps, although in practice, the time lines have been delayed and proceedings have somewhat deviated due to that lack of clarity on certain sections of the IBC.
(1) The process can be triggered with as low as INR 100k (USD 1,500) in unpaid dues by the corporate debtor. An insolvency application is filed and if the NCLT agrees that a default has occurred, the CIRP is initiated. The process can be cancelled on approval of the applicant with 90% approval of the COC (Pg. 17), or by Supreme court under Article 142 of the Constitution of India.
(2) Upon admission, a moratorium comes into force preventing any commencement or continuation of any proceedings against the debtor or any action to enforce or foreclose any assets, and any action by a lessor to recover property. However, Section 14(3)(b) of the IBC allows the creditors to invoke personal or corporate guarantees during the CIRP.
(3) The process is administered by an NCLT appointed independent resolution professional (RP) who is usually nominated by the petitioner. Initially, the RP has 180 days to come up with a creditor approved plan although this can be extended by an additional 90 days for a total of 270 days.
(4) The RP invites creditor claims and forms a Committee of Creditors (COC) made up of only financial creditors. In theory, operational creditors are not party to discussions on a resolution plan, but in practice key operational creditors are consulted in the process especially if their support is required to maximise the value of the business as a going concern. The RP’s duty amongst others is to decide the nature and verification of claims, according to Section 18 and 10 of the IBC. This typically means dividing creditors into secured financial creditors, unsecured financial creditors and operational creditors.
(5) The RP values the business and by the 75th day of the process, invites Expressions of Interest (EOI) with bids to be received within 60 days. Upon receipt of bids, RP solicits the COC to vote and decide on the restructuring proposal within one month.
(6) If 66% in value of the COC approve the plan (which includes a plan on the distribution of proceeds), it will bind all financial and operational creditors, thus cramming down any dissenting creditors including unsecured and operational creditors which did not have had a say on the restructuring proposal.
(7) The resolution plan if approved by the COC, is submitted by the RP to the NCLT and upon the tribunal’s approval, the plan is implemented with the moratorium ceased to have effect.
Page 6
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
PRICE TREND FOR RCOM’S 6.5% USD 300m SENIOR SECURED NOTES DUE 2020
Source: Debtwire, Eikon
COMPANY DESCRIPTION
Reliance Communications Limited (RCom) is a Maharashtra, India-headquartered wireless-communications, data-centre and undersea-cable company. After a 15 month struggle in which the company attempted to monetise assets to ward off a bankruptcy process, insolvency proceedings have now officially begun. Once India’s second-largest wireless-communications player in what was expected to be a booming market, the company –controlled by tycoon Anil Ambani – was the most high-profile loser in the brutal war for users that reached its apex with the aggressive entry into the space in September 2016 by Reliance Jio Infocomm (Jio), controlled by Anil’s big brother and frequent foil, Mukesh Ambani. Under a late-December 2017 definitive agreement, Jio was supposed to buy the majority of RCom’s wireless assets but the deal was mutually terminated in March 2019 after RCom failed to get
approval from its lenders. Following the deal’s collapse, the NCLT ordered RCom into bankruptcy on 7 May 2019.
As of 31 March 2018, RCom reported INR 545bn of consolidated debt including INR 67bn in spectrum liabilities due to India’s Telecommunications Department and non-recourse debt at GCX Ltd, RCom’s undersea-cable arm, of INR 23bn. INR 334bn of debt including the USD 300m due-November 2020 bonds or ~61% of total consolidated debt is classified as secured and share collateral over RCom’s tower assets, optic fibre cables and spectrum licenses through a master security trustee agreement signed in March 2011.
RCom reported FY18 revenues and EBITDA of INR 46bn and INR 9bn, respectively excluding assets held for sale to Jio. Including the assets for sale, FY18 net loss deteriorated to INR 239bn from a loss of INR 13bn in FY17.
Anil Ambani’s stake in RCom fell to 22% as of 31 March 2019 compared to 53% in December 2018 after lenders and debenture holders invoked a share pledge after the Jio asset sale fell through.
RCom was incorporated in July 2004 and was then listed on stock exchanges of India on 6 March 2006.
15
25
35
45
55
65
75
85
95
105
2-Jun-17: RCom
announces that
lenders have formed
a JLF and the company will be put
through the SDR
process
13-Sep-17:
Ericsson India files
an insolvency
petition against RCom, Reliance
Infratel and
Reliance Telecom
27-Nov-17: Debtwire
reports China
Development Bank filed
an insolvency petition against RCom
28-Dec-18: RCom signs
binding agreement with
RJio for sale of assets.
5-Jan-18: Debtwire reports China
Development Bank
withdraws insolvency
petition against RCom
15-May-18: NCLT
admits RCom, Reliance
Infratel and Reliance
Telecom into CIRP on Ericsson's petition
31-May-18:
NCLAT stays IBC
proceedings and
allows asset worth INR 181bn
for sale to RJio
and Brookfield13-Aug-18: RCom
and Reliance Telecom
have reinstates INR
7.74bn bank guarantees with the
Department of
Telecommunications
23/27-Aug-18: RCom
completes sale of MCN
worth INR 20bn and
fibre network worth INR 30bn to RJio
7-Sep-18:
Debtwire reports
that lenders
haven't signed revised
restructuring
proposal
19-Mar-19: RCom
makes INR 5.8bn
settlement payment
to Ericsson. RCom and RJio
terminate asset sale
agreement.
30-Apr-19: NCLAT
permits RCom to
withdraw the appeal
prompting the 30 May 2018 imposition of stay
to its bankruptcy
proceedings
Page 7
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
RCOM LENDER-WISE EXPOSURE AS OF 30 JUNE 2018
S.No. Name INRm USDm
1 China Development Bank 80,307 1,173
2 Life Insurance Corporation of India 42,729 624
3 State Bank of India 33,792 494
4 Export Import Bank of China 28,054 410
5 Axis Bank 22,341 326
6 Noteholders (represented by the Notes Trustee) 22,095 323
7 Bank of Baroda 20,658 302
8 Industrial and Commercial Bank of China 14,018 205
9 Standard Chartered Bank 11,825 173
10 Punjab National Bank 10,781 157
11 Syndicate Bank 10,648 156
12 IDBI Bank Limited 8,743 128
13 Union Bank of India 8,512 124
14 UCO Bank 8,067 118
15 Bank of India 7,682 112
16 Corporation Bank 7,405 108
17 Canara Bank 7,230 106
18 Bank of Maharashtra 4,888 71
19 United Bank of India 4,748 69
20 Oriental Bank of Commerce 4,623 68
21 Bank of America 4,049 59
22 Central Bank of India 4,026 59
23 YES Bank Limited 3,913 57
24 Assets Care & Reconstruction Enterprise Limited
(in relation to the Obligor Loans transferred by DBS Bank Limited)
3,438 50
25 India Infrastructure Finance Company Limited 2,866 42
26 Dena Bank 2,851 42
27 Deep Industrial Finance Limited 2,740 40
28 Pearl Housing Finance Limited 2,740 40
29 Shriyam Auto Fin Limited 2,740 40
30 Traitrya Construction Finance Limited 2,740 40
31 IFCI Limited 2,376 35
32 Credit Agricole 2,250 33
33 Vishvakarma Equipment Finance Limited 1,496 22
34 Deutsche Bank 1,472 22
35 Indian Overseas Bank 1,409 21
36 Vijaya Bank 970 14
37 Neptune Steel Strips Limited 717 10
38 HDFC Bank Ltd. 594 9
Total 402,530 5,879
Source: Debtwire, Ministry of Corporate Affairs
RITL LENDER-WISE EXPOSURE AS OF 30 JUNE 2018
S.No. Name INRm USDm
1 State Bank of India 5,941 87
2 Standard Chartered Bank 4,657 68
3 VTB Capital PLC 4,657 68
4 Mahimna Mercantile Credits Limited 4,327 63
5 Doha Bank Q.P.S. C. 3,725 54
6 Emirates NBD Bank PJSC Dubai 2,980 44
7 Industrial and Commercial Bank of China 2,533 37
8 Standard Chartered Bank 2,188 32
9 Syndicate Bank 36 1
10 HDFC Bank Ltd. 28 0
Total 31,073 454
Source: Debtwire, Ministry of Corporate Affairs
RTL LENDER-WISE EXPOSURE AS OF 30 JUNE 2018
S.No. Name INRm USDm
1 China Development Bank 9,948 145
2 IDBI Bank Limited 4,465 65
3 Punjab National Bank 3,446 50
4 HSBC France supported by BPI France -
Assurance Export 2,871 42
5 Export Import Bank of China 2,487 36
6 State Bank of India 1,405 21
7 Vishvakarma Equipment Finance Limited 1,259 18
8 Canara Bank 584 9
9 Bank of India 547 8
10 Syndicate Bank 431 6
11 Barclays Bank 360 5
12 Union Bank of India 257 4
13 Indian Overseas Bank 215 3
14 Central Bank of India 215 3
15 Oriental Bank of Commerce 171 3
16 Corporation Bank 162 2
17 HDFC Bank Ltd. 0 0
Total 28,824 421
Source: Debtwire, Ministry of Corporate Affairs
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Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
CONSOLIDATED FINANCIAL SUMMARY
INRbn 2014 2015 2016 2017 2017(1) 2018(1) TTM 9M19 9M18 9M19 YoY % ∆
Period ending Mar-14 Mar-15 Mar-16 Mar-17 Mar-17 Mar-18 Dec-18 Dec-17 Dec-18
Revenue 212 218 220 195 66 46 40 36 31 -16.2%
Adjusted EBITDA 69 73 74 51 12 9 6 7 4 -43.5%
Adjusted EBITDA margin 32.6% 33.6% 33.6% 26.1% 18.8% 18.6% 14.0% 18.6% 12.5% -
Company stated EBITDA 77 75 74 54 - 9 - - - -
EBITDA margin 0.4 34.5% 33.8% 27.7% - 19.6% - - - -
Discontinued operations
Revenue - - - - 129 45 - - - -
Adjusted EBITDA - - - - 38 -16 - - - -
EBITDA margin - - - - 29.3% - - - - -
Net interest Expense -30 -27 -19 -21 -2 -2 - - - -
Operating cash flow 38 5 109 -37 -37 -5 - - - -
Capital expenditure -22 -25 -153 -39 -39 -6 - - - -
Free cash flow 17 -20 -44 -76 -76 -11 - - - -
Net borrowings -14 -24 37 33 33 6 - - - -
Equity raised / Dividends -1 61 0 0 0 0 - - - -
Change in Cash 2 16 -7 -43 -43 -5 - - - -
Cash 5 13 8 10 10 6 - - - -
Total Debt 420 395 469 495 495 544 - - - -
Net Debt 415 381 461 485 485 538 - - - -
Total Debt/Adj. EBITDA 6.1x 5.4x 6.4x 9.8x 40.2x 63.8x - - - -
Net Debt/Adj. EBITDA 6.0x 5.2x 6.3x 9.6x 39.3x 63.0x - - - -
Adj. EBITDA / cash interest paid 2.3x 2.7x 2.3x 1.5x 0.4x 0.6x - - - -
Source: Debtwire, company filings. (1) The numbers for FY17 and FY18 have been restated in FY18AR as certain business units of the company have been classified as held for sale.
GCX FINANCIAL SUMMARY
USDm 2014 2015 2016 2017 2018 TTM 1H19 1H18 1H19 YoY % ∆
Period ending Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Sep-17 Sep-18
Revenue 515 483 431 403 362 347 183 168 -8.0%
Adjusted EBITDA 133 121 139 126 109 96 57 44 -21.8%
Adjusted EBITDA margin 25.8% 25.1% 32.2% 31.3% 30.0% 27.7% 30.9% 26.3% -
Net interest Expense -7 -24 -28 -28 -28 -27 -14 -13 -3.9%
Operating cash flow 164 51 25 5 27 9 -1 -18 -
Capital expenditure -20 -268 -32 -21 -30 -28 -13 -11 -15.9%
Free cash flow 144 -217 -8 -16 -3 (18) (15) (30) -
Net borrowings -4 297 -2 9 -11 0 -11 0 -
Equity raised / Dividends 0 0 0 -15 0 0 0 0 -
Change in Cash 139 79 -9 -22 -14 -18 -25 -30 17.3%
Cash 14 92 83 63 48 19 - 19 -
Total Debt 49 367 365 374 353 354 - 354 -
Net Debt 35 275 281 311 305 335 - 335 -
Total Debt/Adj. EBITDA 0.4x 3.0x 2.6x 3.0x 3.3x 3.7x - - -
Net Debt/Adj. EBITDA 0.3x 2.3x 2.0x 2.5x 2.8x 3.5x - - -
Adj. EBITDA / cash interest paid 41.2x 7.7x 5.3x 4.9x 4.3x 3.9x - - -
Source: Debtwire, company filings
Page 9
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
DETAILED CONSOLIDATED CAPITAL STRUCTURE (INRbn) AS OF 31 MARCH 2018
Instrument Issuer Issue Date Interest rate Maturity Outstanding
(INRbn) Outstanding
(USDm)(1) Leverage
Rupee Term loans from banks RCom 8.65% - 11.65% 2017 - 2022 beyond 103 1,584
Rupee Term loans from banks - subsidiary level Reliance Telecom 2.67% - 16.45% 2017-2022 6 95
Rupee Term loans from banks - subsidiary level Reliance Infratel 12.50% 2017-2022 7 104
Rupee Loans from others RCom 8.65% - 11.65% 2017 - 2022 beyond 13 207
Rupee Loans from others - subsidiary level Reliance Infratel 4 67
INR 30bn 11.20% Non-Convertible Debenture RCom 02-Mar-09 11.20% 01-Mar-19 30 461
INR 15bn 11.25% Non-Convertible Debenture RCom 07-Feb-12 11.25% 07-Feb-19 8 115
Foreign Currency loans from banks RCom 3.09% - 5.40% 2017-2021 112 1,720
Foreign Currency loans from banks - subsidiary level Reliance Telecom 2.67% - 16.45% 2017-2022 13 206
Foreign Currency loans from banks - subsidiary level Reliance Infratel - <1 year 16 249
Foreign Currency loans from banks - subsidiary level Others - - 2 29
USD 300m 6.5% Senior Secured Notes RCom 06-May-15 6.50% 06-Nov-20 19 297
Total secured debt(2) 334 5,135 37.2x
Rupee Term loans from banks RCom 11.70% <1 year 19 287
Rupee Term loans from banks - subsidiary level Others 3 49
Rupee Term loans from others RCom 8.65% - 11.7% 2017 - 2022 beyond 57 878
Rupee Term loans from others - subsidiary level Others 39 603
Foreign currency loans RCom
5.44%
<1 year 2 30
Foreign currency loans - subsidiary level Others 1 11
Deferred liabilities of spectrum(3) RCom 10.00% <1 year 41 637
Deferred liabilities of spectrum(3) Reliance Telecom 10.00% <1 year 26 393
Total debt for RCom (excl. GCX) 522 8,023 58.1x
GCX's USD 350m 7% Senior Secured notes GCX Ltd 01-Aug-14 7.00% 01-Aug-19 23 349
Total debt for RCom (incl. GCX) 545 8,372 60.6x
Cash and cash equivalents 6 94
Net debt 539 8,278 59.9x
Market capitalisation 5 76
Enterprise Value 544 8,354
Adjusted EBITDA (FY18) 9 EV/EBITDA 60.5x
Source: Debtwire, company reports. (1) INR / USD 0.01537 as of 31 March 2018, sourced from Oanda.com (2) Of the total secured debt amounting to INR 315bn from banks, financial institutions and debenture holders, the company has defaulted on dues amounting to INR 125bn in principal and INR 3.7bn in interest, as per AR18 (3) Company has classified the liabilities as current due to its relation to the assets which are held for sale.
Page 10
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
RELIANCE INFRATEL CAPITAL STRUCTURE (INRm) AS OF 31 MARCH 2018
Instrument Lenders /
Subscriber Coupon Maturity
Outstanding (INRm)
Outstanding (USDm)(1) Leverage Security
Foreign currency loans from banks
Standard Chartered
Bank, London
5.54% 2018-19 16,230 249
Secured by first pari passu charge on the tower assets and optic fibre cables, capital work in progress including
all the rights, titles, interest, benefits, claims and demands relating to RITL, RCom, RTL and RCIL.
Also guaranteed by ultimate holdco
Rupee loans from banks Standard
Chartered Bank
12.50% 2019-20 1,920 30 Secured by second pari passu charge over moveable
assets of the borrower group and guaranteed by ultimate holdco
Rupee loans from banks State Bank
of India 2018-19 4,850 75 In addition to the above second charge, INR 4.85bn of
loans from banks are also secured by tower receivables, pledge of equity shares of Reliance IDC Ltd held by
Reliance Webstores Ltd Rupee loans from financial institutions 2018-19 4,330 67
Total secured debt 27,330 30 5x
Rupee loan from financial institution 12.50% 2019-20 3,450 53
Rupee loan from related party Reliance Capital Ltd 3,760 58
Rupee loans from banks Syndicate Bank 30 0
Interest accrued and due 310 5
Total debt for RCom (excl. Preference shares)
34,880 146 7x
0.1% Redeemable Non Convertible Preference Shares
Reliance Communications
Ltd 40,000 615
Total debt for RCom (incl. Preference shares)
74,880 760 15x
Cash and cash equivalents 530 8
Net debt 74,350 752 15x
Adjusted EBITDA ( FY18) 5,040
Source: Debtwire, company reports. (1) INR / USD 0.01537 as of 31 March 2018, sourced from Oanda.com RITL - Reliance Infratel Ltd, RCom - Reliance Communications Ltd, RTL - Reliance Telecom Ltd, RCIL - Reliance Communications Infrastructure Ltd
RELIANCE INFRATEL FINANCIAL SUMMARY
INRm 2014 2015 2016 2017 2018 YoY % ∆
Period ending Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Revenue 76,600 58,580 45,880 60,520 32,940 -45.6%
Adjusted EBITDA 36,830 23,400 19,230 32,030 5,040 -84.3%
Adjusted EBITDA margin 48.1% 39.9% 41.9% 52.9% 15.3% -
Net interest Expense -10,790 -6,900 -6,570 -5,200 -2,030 -61.0%
Operating cash flow 42,620 26,110 15,880 -3,530 5,080 -
Capital expenditure -10,220 -10,870 -7,440 -7,960 -1,450 -
Free cash flow 32,400 15,240 8,440 -11,490 3,630 -
Net borrowings -21,570 -15,200 10,420 14,890 -3,620 -
Equity raised / Dividends 0 0 0 0 0 -
Change in Cash 10,830 40 18,860 3,400 10 -
Cash 40 80 630 140 530 -
Total Debt 66,160 91,870 103,210 118,060 74,880 -36.6%
Net Debt 66,120 91,790 102,580 117,920 74,350 -36.9%
Total Debt/Adj. EBITDA 1.8x 3.9x 5.4x 3.7x 14.9x -
Net Debt/Adj. EBITDA 1.8x 3.9x 5.3x 3.7x 14.8x -
Adj. EBITDA / cash interest paid 4.9x 2.4x 2.6x 4.8x 5.5x -
Source: Debtwire, company filings
Page 11
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
RELIANCE TELECOM CAPITAL STRUCTURE (INRm) AS OF 31 MARCH 2018
Instrument Lenders /
Subscriber Coupon Maturity
Outstanding (INRm)
Outstanding (USDm)(1) Leverage Security
Foreign currency loans from banks
China Development Bank, Export Import Bank
of China, HSBC France
2.82% - 16.25%
2019-2022
13,411 206
Secured by (1) First pari passu charge on the moveable assets including tower assets and optic fibre cables, capital work in progress including all the rights, titles, interest,
benefits, claims and demands relating to RITL, RCom, RTL and RCIL. (2) Pledge of equity shares of RCIL held by RCom and of RTL held by RCom and Reliance Realty Ltd.
(3) Lenders of foreign currency loans have been assigned 8 unified access services licenses, while assign-
ment of telecom licenses for the rupee term loans is pending to be executed. (4) Foreign currency loans are
guaranteed by the holdco. (5) Rupee term loans are also secured by pledge of equity shares of RITL held by RCIL,
assets and corporate guarantee of the borrower group.However charge over part immoveable assets of
the borrower and Reliance Globalcom BV is pending
Rupee loans from banks Consortium
lenders 6,152 95
Total secured debt 19,562 301 -
Rupee loans from others 3,627 56
Loans from related parties Holdco and
fellow subsidiaries <1 year 31,817 489
Interest due on borrowings <1 year 455 7
Capital Creditors 1,525 23
Total debt for RCom (excl. Preference shares)
56,985 876 -
1% Redeemable Non Convertible Preference Shares
Reliance Communications
Tamilnadu Ltd 1.0% <1 year 13,927 214
Total debt for RCom (incl. Preference shares)
70,912 1,090 -
Cash and cash equivalents 128 2
Net debt 70,784 1,088 -
Adjusted EBITDA (FY18) -1,892
Source: Debtwire, company reports. (1) INR / USD 0.01537 as of 31 March 2018, sourced from Oanda.com RITL - Reliance Infratel Ltd, RCom - Reliance Communications Ltd, RTL - Reliance Telecom Ltd, RCIL - Reliance Communications Infrastructure Ltd
RELIANCE TELECOM FINANCIAL SUMMARY
INRm 2014 2015 2016 2017 2018 YoY % ∆
Period ending Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Revenue 36,828 34,700 27,541 17,762 6,515 -63.3%
Adjusted EBITDA 3,971 6,224 4,371 -628 -1,892 201.2%
Adjusted EBITDA margin 10.8% 17.9% 15.9% - - -
Net interest Expense -3,391 -3,529 -1,943 -4,926 -2,651 -46.2%
Operating cash flow 409 4,731 -5,836 3,925 -1,743 -
Capital expenditure -16,608 -761 -7,756 -939 -542 -42.3%
Free cash flow -16,199 3,970 -13,592 2,986 -2,285 -
Net borrowings 2,415 -4,868 13,558 -3,190 -16 -
Equity raised / Dividends 13,477 500 0 0 0 -
Change in Cash -308 -398 -34 -204 -2,301 -
Cash 482 86 70 23 128 -
Total Debt 43,415 49,775 64,827 65,955 70,912 7.5%
Net Debt 42,934 49,689 64,758 65,933 70,784 7.4%
Total Debt/Adj. EBITDA 10.9x 8.0x 14.8x - - -
Net Debt/Adj. EBITDA 10.8x 8.0x 14.8x - - -
Adj. EBITDA / cash interest paid 3.0x 1.7x 0.9x - - -
Source: Debtwire, company filings
Page 12
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
KEY EVENTS
7-May-19 – NCLT orally directs resumption of insolvency proceedings against RCom and its two subsidiaries Reliance Infratel Ltd (RITL) and Reliance Telecom Ltd (RTL). According to an Economic Times article, the NCLT has asked the interim resolution professional to submit a progress report on insolvency process by 30 May 2019. The IRP has asked for the period between 30 April 2018 to 30 May 2019 to be excluded from the insolvency process following a stay by the NCLAT on 31 May 2018.
6-May-19 – RCom’s lead lender SBI nominated Deloitte backed Anish Niranjan Nanavaty as resolution professional to replace Ericsson India-nominated RBSA Advisors, reports Debtwire.
30-Apr-19 – NCLAT allows RCom to withdraw an appeal which prompted the 30 May 2018 imposition of a stay to its bankruptcy process.
29-Apr-19 – RCom fails to pay spectrum installment of INR 4.92bn for the third time on 19 April, including 10-day grace period, reports Economic Times. The same article states that RCom missed spectrum dues of INR 2.81bn on 5 April and INR 210m on 13 March.
18-Apr-19 – GCX’s financial advisor Lazard is circulating an information memo for a private loan to redeem USD 350m 7% bonds due 1 August, reports Debtwire.
27-Mar-19 - NCLAT stays India’s Department of Telecommunications’ (DoT) notices seeking cancellation of RCom’s spectrum permits following delayed license payments. DOT sent a letter to Axis bank to invoke INR 20bn bank guarantees given by RCom, this was stayed as well by the NCLAT.
26-Mar-19 – Ericsson moves the Supreme Court to end insolvency proceedings and to drop contempt charges against Anil Ambani, as per Economic Times.
19-Mar-19 - RCom confirms payment of INR 5.5bn (USD 80m) plus interest to Ericsson (Debtwire later reported the full amount was INR 5.8bn including the interest). The payment was made in compliance with a Supreme Court judgement, with Mukesh Ambani providing the funds, although it is unclear if it was a personal loan to Anil Ambani or RCom, or paid directly by Mukesh. Failure to pay would have led to Anil Ambani being in contempt of court and possibly facing jail time.
18-Mar-19 RCom and Reliance Jio mutually terminate their asset sale agreement.
6-Mar-19 - The ad-hoc group of GCX bondholders led by Bardin Hill (fka Halycon Capital) and Blenheim Capital hired Goldman Sachs and White & Case as advisors, reports Debtwire. Varde Partners, the largest holder of GCX bonds has hired Kirkland & Ellis to advise a group of non-ad hoc bondholders.
5-Feb-19 - Telecom Disputes Settlement and Appellate Tribunal (TDSAT) directed the DOT to return RCom’s bank guarantee of INR 20bn (USD 279m) as per earlier order passed on 3-Jul-18.
24-Jan-19 - RCom announces that it will not make INR 3.75bn payment on its non-convertible debentures due 7-Feb-18 as it was awaiting funds from the Jio asset sale which never came in.
23-Jan-19 – Rating agency Fitch downgrades GCX Ltd.’s USD 350m 7% secured bond to CCC from B-.
7-Jan-19 - RCom deposits INR 1.31bn with Supreme Court as part payment of the INR 5.8bn due to Ericsson including accrued interest.
3-Dec-18 – Reliance Realty, wholly-owned subsidiary of RCom, submits INR 14bn corporate guarantee to DOT.
30-Nov-18 - Arbitration proceedings begin as certain RCom lenders demand priority repayment while a group of Indian lenders are pushing for pari passu distribution, reports Debtwire.
27-Aug-18 - RCom announces completion of sale of its fibre network and related infrastructure worth INR 30bn (USD 417m) to Reliance Jio.
23-Aug-18 - RCom completes the sale of its media convergence nodes (MCNs) and related infrastructure to Reliance Jio worth INR 20bn (USD 285.3m).
22-Aug-18 - RCom floated a revised restructuring proposal to its onshore lenders, offering to settle either at 25 cents on the dollar or with equity-like instruments the expected 59-cents-on-the-dollar principal not repaid from the Reliance Jio deal which it struck in December 2017, as per Debtwire.
13-Aug-18 - RCom reinstates INR 7.74bn bank guarantees with DOT in turn protecting its spectrum licenses.
11-Aug-18 – RCom announces sale of 800MHz spectrum across 22 circles to Jio. This does not include the spectrum covered under the master agreement signed in December 2017.
30-Jul-18 - Credit Agricole sells INR 1.9bn (USD 28m) RCom loans to a special situations investor, according to Debtwire.
31-May-18 – NCLAT stays the IBC proceedings against RCom, RITL and RTL till end September while allowing the proposed asset sales to Jio and Brookfield Asset Management Inc to continue.
4-Apr-18 – Varde Partners purchases RCom’s INR 3bn rupee loan from DBS bank at 52 cents, reports Debtwire.
15-May-18 – RCom, RTL and RITL admitted into bankruptcy by NCLT Mumbai following a petition from operational creditor Ericsson India claiming INR 10bn (USD 146m) in dues.
28-Dec-17 - RCom signs a binding agreement with Jio for sale of its 122.4 MHz of 4G spectrum across 800/900/1800/2100 MHz band, 43,000 towers, 178k km of fibre and 248 MCNs.
21-Nov-17 - RCom lenders approve sale of real estate assets in Delhi and Chennai for INR 8.01bn to Brookfield, according to Times of India.
Page 13
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Tearsheet/Credit report DW-APAC 22-May-19
RELIANCE COMMUNICATION LTD(1)(2) —Wireless and other telecom
operations
USD 300m 6.5% senior se-cured notes due 2020
Anil D. Ambani & family and other promoter group
11.1% 5.94%
Public shareholders and others
60.96%
21.20%
Reliance Globalcom BV (The Netherlands)
(100%)
-Investment Holding
10.74%
Reliance Big TV Limited (100%) - Direct o Home
(DTH)
Life Insurance Corporation of India
Globalcom IDC Limited (100%) - Internet data
centers
Reliance Webstore Limited (100%)
- Trading & Marketing
78.80%
79.71%
Reliance Communications Infrastructure Limited(1)
(100%)
-Investment Holding
Rattan India Finance Pvt Ltd through a broker
Moneypalm Investment Solutions Pvt Ltd
22.0%
Reliance Realty Ltd (3) (100%)
-Investment Holding
Reliance Telecom Limited(1)(3)
- Wireless operation
Reliance Infratel Limited(1)
- Telecom tower and Optic fiber cable
Reliance Communication Inc. (USA) (100%) - Int’l voice & data
services
Global Cloud Xchange Limited (Bermuda)
(100%)
-Investment Holding
GCX Limited(Bermuda) (100%)
-Investment Holding
Reliance Globalcom Limited
(Bermuda) (100%)
- Investment Holding
FLAG Telecom Group Services Limited
(Bermuda) (100%)
- Investment Holding
Flag Telecom Group
- Capacity leasing and internet protocol
Vanco Group
- Capacity leasing and internet protocol
Collaterals for the due-2020 notes: (1)Charge over present and future movables of RCom, Reliance Telecom Limited, Reliance
Infratel Limited and Reliance Communications Infrastructure Limited (2)Assignment of 20 unified access service licenses and one national long distance and one
International long distance license of RCom (2)Pledge of entire shareholding of Reliance Telecom Limited and Reliance Infocomm Infra-
structure Limited held by RCom
Source: Offering circular of USD 300m 6.5% senior secured notes dated 27 April 2015
Indian Subsidiary
Issuer group security providers of the due-2020 notes
Overseas subsidiaries
Restricted subsidiaries under RCom’s due-2020 notes
Restricted group under GCX’s due-2019 notes
Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
ORGANIZATION STRUCTURE OF GCX GROUP
Source: Offering circular of GCX’s USD 350m 7% senior secured bonds due-2019 Note: all shareholdings are at least 99.9% unless otherwise stated
Pag
e 1
4
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Restructuring Primer 22 May 2019 India
Reliance Communications Limited Telecom
Disclaimer
We have obtained the information provided in this report in good faith from publicly available data as well as Debtwire data and intelligence, which we consider to be reliable. This information is not intended to provide tax, legal or investment advice. You should seek independent tax, legal and/or investment advice before acting on information obtained from this report. We shall not be liable for any mistakes, errors, inaccuracies or omissions in, or incompleteness of, any information contained in this report, and not for any delays in updating the information.
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Tearsheet/Credit report DW-APAC 22-May-19
ADDITIONAL CONTACT INFORMATION
Luc Mongeon Managing Editor, Asia Pacific
+65 6349 8054 [email protected]
Chaim Estulin Senior Editor, Asia Pacific
+852 2158 9725 [email protected]
USEFUL LINKS
- 2018 Annual Report
- 2017 Annual Report
27-Apr-15 RCom USD 300m notes due 2020 Bond Document
3-Aug-18 Global Cloud Xchange USD 45m due 2023 Preliminary Document
(not issued)
17-Aug-18 Amended Insolvency and Bankruptcy Code, 2016
10-Jan-18 Debtwire’s RCom Case Profile
