R-Infra monetisation strategy paid off but did it help similar companies?

Anil Ambani last week spelt out the road-ahead for Reliance Infrastructure (R-Infra) heralding an end to its asset monetisation strategy. The group had adopted an asset-light model all along just like GMR Infrastructure, GVK Power and Infrastructure and Lanco Infratech among others.

The storyline has been typical which started with an aggressive capital heavy expansion plan followed by huge debt and not necessarily higher profits. Though L&T’s IDPL and IL&FS’s ITNL, too, experimented with this model but the results have been different for each of them. Some, like GVK and GMR, managed to reduce debt and operate a leaner model, while others like Lanco staring at insolvency despite the asset-light strategy.

“The experience in the infrastructure sector and more so in the energy sector, has been very difficult for every group that entered it. They were hurt by macro issues, internal problems, and the inability of collecting fees for their projects and so on. There is no solution, but for companies to go the asset-light way,” said Harish HV, an independent consultant.

RInfra consortium inks MoU for Rs 70 bn Versova-Bandra sea link project

Reliance Infrastructure (RInfra) said Tuesday that its consortium has inked an MoU with Maharashtra State Road Development Corporation (MSRDC) for the Rs 70 billion Versova-Bandra Sea Link Project in Mumbai.

"Reliance Infrastructure Limited - Astaldi SpA (Italy) Consortium signed an agreement with MSRDC today for construction of prestigious Versova-Bandra Sea Link Project in Mumbai," the company said in a statement.

Reliance Infrastructure-Astaldi had earlier bagged the engineering, procurement and construction (EPC) contract for the Rs 70 billion project on a competitive bid basis. The consortium had emerged the most competitive bidder with their bid of Rs 69.93 billion.

The other bidders in the fray were L&T-Samsung and Hyundai Development Company-ITD, it said in a statement adding that the tender for the construction of the second sea link in Mumbai on EPC basis was floated by the MSRDC.

Anil Ambani-led RInfra wins Rs 2 billion arbitration against NHAI

Reliance Infrastructure (RInfra) has won a Rs 2 billion arbitration award against the National Highway Authority of India (NHAI), the company said on Monday.

In a statement, the company said that a three-member Arbitration Tribunal, on August 31 in a unanimous award asked the NHAI to pay RIfra Rs 1.5 billion by November 29.

"NHAI will have to pay interest at 12 per cent per annum on the amount if they do not pay Rs 1.5 billion by the deadline," it said.

"The Tribunal has also awarded Reliance Infrastructure compensation at 13.5 per cent of actual revenue for the loss of revenue suffered due to change in location of the toll plaza.

"This is payable from March 2017 till the end of concession on January 14, 2038. Net present value of this future cash flow is estimated at over Rs 500 million."

Reliance Infra completes Rs 188 billion Mumbai power biz sale to Adani

Reliance Infrastructure (RInfra) on Wednesday said it has completed the Rs 188 billion deal for sale of its Mumbai energy business to Adani Transmission, which will help it pare debt by two-thirds to Rs 75 billion.

Company chairman Anil Ambani announced the culmination of the deal involving the sale of the integrated power business which was stuck in December last year.

Ambani said the deal will help cut the company's overall debt to Rs 75 billion from the earlier Rs 220 billion and also added that it is planning to be a zero debt company by next year.

The company had called a board meet today to approve the transfer of Mumbai power business to Adani Transmission, after receiving the regulatory approvals.

In the past eight months, the deal has received go-aheads from fair trade regulator Competition Commission of India (CCI), shareholders of the company and Maharashtra Electricity Regulatory Commission (MERC) for the sale.

Reliance Communications gets relief from bondholders as deadline looms

Reliance Communications Ltd., the embattled Indian phone company headed by billionaire Anil Ambani, clinched the approval of its overseas bondholders to ease the carrier’s debt burden, putting the company a step closer to averting bankruptcy.
The Indian phone operator, which defaulted last year on a $300-million bond, got 83 percent of bondholders to approve the plan, the company said in an exchange filing.

The vote was crucial for Ambani because settling the matter was a precondition for RCom to reorganise its larger local debt. The company has been working against the clock to reach agreements with all its creditors by Aug. 27 or face insolvency proceedings.
RCom is also in the midst of completing its sale of airwaves, towers and fiber to a rival controlled by Ambani’s older brother, who’s India’s richest man. The brothers wrapped up a smaller deal involving transmission nodes, worth 20 billion rupees, on Aug. 23.

Headcount at RCom down 94% to 3,400 from peak of 52,000 in 2008-12

Debt-ridden Reliance Communications on Wednesday said that the total number of jobs at the company have been reduced by about 94 per cent to 3,400 at present, from a peak level of 52,000. "Total number of people in the RCOM group: from peak of approximately 52,000 to current 3,400, a reduction of approximately 94 per cent," RCom said in a BSE filing on Wednesday. 

The company is estimated to be at peak in around 2008-10. RCom, which is reeling under debt of around Rs 450 billion, closed its mobile services business in January this year and continues to provide business-to-business (B2B) telecom services.

Reliance Commercial Finance appoints Devang Mody as CEO

Latest News - Reliance Commercial Finance, a subsidiary of Reliance Capital, on Tuesday announced the appointment of Devang Mody as chief executive officer.

Prior to this, Mody served as president of consumer business at Bajaj Finance.

The consumer finance business of Bajaj Finance, under his leadership, witnessed a sharp growth to its current size spanning over 300 towns, with market leadership positions across various business lines.

Mody, aged 44, has over 20 years of experience in the financial sector. He started his career with Mahajan & Aibara, and then moved on to EY, followed by a stint at GE Money Financial Services where he was VP - Strategic Initiatives, before moving to Bajaj Finance.

"I am delighted to welcome Devang Mody as the new CEO of our commercial finance business, a high priority growth area for (Read More)