Reliance Communications (RCom) is looking to monetize its non-core assets. With this, the company plans to bring down the debt-to-EBIDTA ratio to about 3 in 18-24 months. To achieve this target, the Anil Ambani-owned firm is planning to hive off its DTH business, sell stake in international operations at Reliance Globalcom and a possible divestment in its tower unit Reliance Infratel, among others. The company’s net debt-to-EBITDA ratio currently is about 4.64. In general terms, debt-to-EBITDA ratio is the measure of the ability of a firm to pay off its debts and is a useful tool in assessing the creditworthiness of a company. Also Read - RCom to go for insolvency resolution process after failure to repay debt
“We are looking to bring down our debt-to-EBIDTA ratio to around 3 within 18-24 months and are looking at monetizing our non-core assets to deleverage the balance sheet,” Reliance Communications (RCom) CEO (Consumer Business) Gurdeep Singh said during an investors call today. He added: “For this, we are looking at hiving off the DTH business, stake sale in our international operations at Reliance Globalcom, monetization of our real estate assets, as well as a possible divestment in Reliance Infratel, which handles our towers portfolio.” Singh said GSM and data business grew by 3.5 percent Q-o-Q and CDMA voice business grew 0.2 percent Q-o-Q (with 76:24 mix between GSM+Data/CDMA voice) resulting in an overall 2.7 percent growth Q-o-Q in the India telecom operations. Also Read - Reliance Communications is selling more bands to Jio to put off debts
“Our CDMA revenue growth, reversing the earlier declining trend, was largely due to acquisition of high ARPU customers and launch of innovative products such as WiPods, Wi-Fi & Mi-Fi Routers and dongles, which have been very successful in the market,” Singh said. The net debt of the company stood at Rs 36,725.7 crore at the end of March 31, 2015. RCom plans to invest about Rs 1,500-2,000 crore in the current fiscal to increase its data business. “We will invest in the range of Rs 1,500-2,000 crore this fiscal. Our focus area would largely be to increase data revenue,” Singh said.