In a smart move, RIL announced the acquisition of RCom assets on Friday thus bailing out their financial woes to some extent. RCom’s telecom infrastructure assets will be taken over by RIL who will acquire the towers, media convergence nodes, optic fiber cable network and most importantly RCom’s 4G spectrum making sure of it not falling into competitor hands.
Taking over the telecom assets of Anil Ambani’s RCom is however, not going to make a change whatsoever in RIL’s credit ratings as disclosed by Moody’s. One of the senior credit officers at the credit rating agency, Vikas Halan said that cash and cash equivalents lying with RIL amounted to Rs 77,000 crore, which could be used for acquiring the telecom assets and hence, no impact would be felt on RIL’s ratings. Halan, further revealed that even if the pay-out amounted to Rs 25,000 crore it comprised 11.6% of the company’s total borrowings as on September 2017 and about 0.4% of pre-tax profit of RIL for the previous year.
The consolidated advantage would be adapted into the existing RIL rating. The credit rating agency clarified that the buffer under RIL’s rating for additional borrowings would decrease, more so, if the company didn’t decrease the telecom business planned capital expenditure. RIL’s announcement of RCom’s acquisition without stating the pay-out figure came as a surprise to one and all. Hopefully, the deal should conclude by March.
Announcement of RCom’s exit from the debt restructuring program was made by Chairman, Anil Ambani in a press conference called for the purpose. This would have caused the major control of the company to pass into the hands of bankers. RCom Chairman had at that time disclosed his expectations from the asset sales to be around Rs 25,000 crore. This he said would be without the inclusion of the operational headquarters, Dhirubhai Ambani Knowledge City in Navi Mumbai.