Reliance Communications asks government panel to relax rules

NEW DELHI: Reliance Communications has asked a government panel to relax rules around cross holding and spectrum cap limits for stressed telcos which are availing of any of the Reserve Bank of India’s ( RBI) schemes, such as strategic debt restructuring, on the grounds that such companies – including itself — require a milder regulatory framework for ‘revitalisation’.

The telco has told the inter-ministerial group (IMG) that a stressed carrier should be allowed five years, instead of one, to reduce its holding in another stressed telco to below the cross holding threshold of 10%, in case of a merger.

In that case, the combined entity should also be given five years, as opposed to the current one year, to conform to spectrum cap rules.

“The existing clauses are relevant as long as the financial health of the companies are in order. However, companies availing the above SDR (strategic debt restructuring) scheme of Reserve Bank of India are already under severe financial duress and for revitalization, need to be treated differently,” the Anil Ambani-owned carrier said in a letter to the IMG.

The inter-ministerial group has been set up by the government to look into the financial health of the telecom sector, which is dealing with debt of nearly Rs 5 lakh crore. Banks though put the debt amount at over Rs 7 lakh crore.

RCom, struggling with a debt of just under Rs 45,000 crore, has defaulted on principal and interest payments of some NCDs.