Reliance Communications shares hit record low on fourth-quarter loss, debt woes
RCom reported a $150 million fourth-quarter loss and worries about its heavy debt load resurfaced.
Shares in mobile carrier Reliance Communications Ltd fell as much as 20 per cent to an all-time low on Monday, after it reported a $150 million fourth-quarter loss and worries about its heavy debt load resurfaced.
The company, controlled by billionaire Anil Ambani, over the weekend posted its second straight quarterly loss, dragged down by a price war in what is the world's second-biggest mobile market by number of users.
The Economic Times newspaper on Monday reported that the company had delayed repayment of loans to more than 10 banks.
Reliance Communications declined to comment on the Economic Times report.
In its quarterly results statement, however, 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 250 billion rupees ($3.9 billion) worth of loans to its lenders with proceeds from its deals with Aircel and Canada's Brookfield Infrastructure, the newspaper cited a company spokesperson as saying.
Reliance Communications is merging its wireless business with rival Aircel, and is also selling a 51 per cent stake in its radio masts business to Canada's Brookfield Infrastructure Group for 100 billion rupees.
Following a sell-off last week due to debt concerns, shares in Reliance Communications plunged further on Monday, falling to their maximum daily limit and hitting a record low of 20.60 rupees. They were down 13 per cent at 22.40 rupees at 0440 GMT.
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.