New Delhi, Aug. 17 (PTI): Telecom operator Reliance Communications plans to cut expansion costs and hive off some assets in its bid to reduce debt by about 37 per cent to Rs 25,500 crore in the next 12 months.
The Anil Ambani-led company plans to use the key infrastructure — mobile towers and optical fibre — of his elder brother Mukesh Ambani’s company Reliance Jio Infocomm for future expansion rather than making its own fresh investments. It will also have a tight leash on its expenditure.
“As a part of our reciprocal arrangement with (Reliance) Jio, the tower and fibre asset will come from Jio. We will invest only in electronics,” R-Com president and CEO Gurdeep Singh said in a discussion with financial companies.
The two brothers, after being apart for about eight years, had joined hands in April 2013 for business co-operation of their telecom entities Reliance Jio and R-Com to utilise existing and future infrastructure of both the companies on a reciprocal basis, including optical fibre, towers and related assets.
“Any future expansion that R-Com will do on the wireless side will be via tower and fibre from Jio or any other more economical viable model. In times to come, you will see a lower capex-to-sales ratio,” Singh said.
R-Com had net debt of about Rs 40,222.6 crore at the end of June 30, 2014. The company in the first week of July had raised about Rs 4,800 crore in a qualified institutional placement (QIP) that was used to reduce the debt to about Rs 35,000 crore.
A company representative said the interest outgo on debt was expected to come down by Rs 600 crore annually after the QIP.
The company also expects to finalise the long pending deal to sell a significant stake in its international submarine optical fibre company Global Cloud Xchange, formerly Reliance Globalcom, in the next 3-4 months.