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Bloomberg
Bondholders of Reliance Communications Ltd., the embattled Indian mobile phone operator controlled by billionaire Anil Ambani, have hired advisers after the company defaulted on its dollar-denominated notes in November.
Certain investors holding a significant percentage of the securities have formed a committee, which has appointed PJT Partners Inc. as its financial adviser and Kirkland & Ellis LLP as its legal adviser, according to a document seen by Bloomberg News. The group has commenced discussions with the company, it said.
Reliance Communications marked the highest-profile default on international debt by an Indian borrower since the nation’s insolvency and bankruptcy code was passed in May 2016, when it failed to pay interest on the dollar bonds in November. The company’s earnings slumped after deep-pocketed Reliance Jio Infocomm Ltd., backed by India’s richest man and Ambani’s older brother, started offering free calls in 2016.
Reliance Communications’ dollar note investors hold only a small portion of the company’s overall debt, so “it’s unclear what their negotiating power is,†said Pavitra Sudhindran, a credit analyst at Nomura Holdings Inc.
The outstanding amount of the securities is only $300 million compared with the company’s total debt, which was about $7 billion as of the end of March, according to Bloomberg data.
Creditors have been circling. China Development Bank asked an Indian tribunal to place the mobile phone operator under insolvency proceedings. PR firm Fortuna Public Relations Pvt. made a similar request. Reliance Communications has said that a standstill period for interest and principal repayments continues until December 2018.