RCom shares surge over 125% in last six trading sessions
At 10.55am, RCom shares were trading 20.39% higher at Rs25.68. Photo: Mint
Mumbai: Shares of Reliance Communications Ltd (RCom) surged over 125% in the last six trading sessions after the company announced a Rs39,000 crore debt resolution plan.
At 10.55am, the stock was trading 20.39% higher at Rs25.68. In intraday trade, shares surged nearly 22% and hit a five month high of 25.92 a share—a level last seen on 28 July. Since 18 December, its stock has risen by 125.36% from Rs11.83 a share. So far this year it declined 31.1%.
“RCom market cap has now almost doubled over the past one month on the stock surge and will enjoy an almost equal ratio with its outstanding debt of Rs6,000 crore post restructuring. Compared to other leading telecom peers, where the outstanding debt is one-third of their respective market-cap, RCom stock has exceeded with its restricting momentum. Hence, the rally may get arrested as the stock is no more under the active coverage of institutional investors and lacks the support in terms of volatility,” an analyst said on condition of anonymity.
The debt ridden company on Tuesday said that it has finalized a debt resolution plan that involves the sale of its assets and does not require lenders and bondholders to write off their dues or convert it into equity. The company has also exited the strategic debt restructuring process (SDR).
According to the plan, which includes the sale of spectrum, fibre and tower network, equity injection by global strategic partners and development of real estate assets, RCom’s debt will be reduced by Rs39,000 crore from the Rs45,000 crore it owed lenders at the end of October.
RCom will reduce debt by Rs25,000 crore by selling assets and transferring its spectrum dues to third parties. The entire proceeds will be used for prepayment to lenders, said chairman Anil Ambani.
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