Reliance Comm faces ‘coupon test’

Bloomberg

Reliance Communications Ltd., the Indian mobile phone operator controlled by billionaire Anil Ambani, faces a bond coupon deadline on Monday after temporarily halting payments to lenders.
The interest payment of about $9.75 million is the latest test for the debt-laden company, which has faced a series of setbacks amid a shakeout in the world’s second-largest telecom market. It announced last month the collapse of its merger plans with rival Aircel Ltd., a deal which could have helped it pare debt and better compete with rivals.
The mobile carrier, whose customer base of about 75
million people is dwarfed by Idea Cellular Ltd. and Bharti Airtel Ltd., proposed earlier that lenders convert $1.1 billion of debt into equity. In the past month, it also withdrew a regulatory document seeking a nod to sell its towers and faced another insolvency petition. The flagship company of the
Reliance Group is in a so-called standstill period with its lenders, and isn’t paying interest and principal on loans until December 2018.
“The upcoming coupon on the bond is uncertain, given the continuing standstill agreement with local banks, recent developments around assets sales, and the new debt recast plan involving partial
conversion to equity,” said Abhishek Rawat, a
director at China Merchants Securities Investment Management (HK) Co.