Indian operator Reliance Communications announced an agreement with its lenders to delay payments on its debt until it can complete a key divestment. The banks agreed to give the company until the end of December to complete the sale of its mobile towers and merger with Aircel, which is expected to reduce RCom's debt by around 60 percent.
RCom said it will also present to the lenders its long-term plans for servicing its remaining debt of INR 200 billion. If the company does not resume debt payments in by January, the lenders may exercise their right to convert the debt.
The deal follows downgrades in RCom's credit ratings at the end of June amid fears it was close to default. It's nor rate B2 with the potential for further downgrade at Moody's. The company's results have been under pressure and cash flow reduced since the arrival of newcomer Jio on the Indian mobile market, which has started a price war on mobile services.
