Reliance Communications shares tumble after Rs966 cr Q4 loss
29 May 2017
The shares of Anil Ambani's Reliance Communications fell as much as 20 per cent to an all-time low today after it reported a Rs966 crore fourth-quarter loss and there were renewed worries about its heavy debt load.
The company over the weekend posted its second straight quarterly loss, dragged down by a price war in the Indian telecom market triggered by brother Mukesh Ambani's Reliance Jio.
The Economic Times today reported that the company had delayed repayment of loans to more than 10 banks. Reliance Communications declined to comment on the report.
The launch in August last year of rival Reliance Industries' Jio 4G service with free voice and data services has forced other networks to come up with cheaper plans of their own, squeezing margins and in some cases dragging down sales, with RCom's bigger rivals Bharti Airtel, Idea Cellular and Vodafone India also suffering from the price war.
In its quarterly results statement Reliance Communications said that "pending formal confirmation by the lenders for waiver of certain loan covenants", some loan amounts would continue to be classified as non-current liabilities. The company plans to repay Rs25,000 crore worth of loans to its lenders with proceeds from its deals with Aircel and Canada's Brookfield Infrastructure, a company spokesperson told ET.
Reliance Communications is merging its wireless business with rival Aircel, and is also selling a 51-per cent stake in its tower business to Canada's Brookfield Infrastructure Group for Rs10,000 crore.
Following a sell-off last week due to debt concerns, shares in Reliance Communications plunged further today, falling to their maximum daily limit and hitting a record low of Rs20.60.
They were down 13 per cent in early noon trade, Reuters reports. A sell-off in its 2020 bonds also resumed on Monday with yields spiking to 17.2 per cent after ending at 12.3 per cent last week.