Anil Ambani‚Äôs Reliance Capital and Reliance Infrastructure could be in the process of selling its assets in a big way to raise funds to pay off its debts as per a Bloomberg report. The younger of the two sons of Dhirubhai Ambani has not been as successful as his father or his elder brother Mukesh. The companies he floated in the infrastructure, finance and telecommunications sectors are sitting over a massive pile of debt, estimated to be Rs 939 billion.
The Bloomberg report claims talks are underway with potential suitors who can buy assets worth Rs 217 billion mainly from Reliance Infrastructure Ltd, which could fetch around Rs 90 billion and from Reliance Capital Ltd the remaining Rs 127 billion. On the block could be nine road projects under different stages of execution. The assets belonging to Reliance Capital to be palmed off will be the FM radio station that can fetch Rs 12 billion and through monetisation of holdings in different entities.
The broad breakup of the Rs 939 billion debt reveals a large chunk shared between Reliance Capital and Reliance Power of Rs 389 billion and Rs 302 billion respectively. The rest are from the books of Reliance Infrastructure and Reliance Naval & Engineering, the defence equipment foray.
The group companies have been embroiled in other related trouble with their statutory auditors PriceWaterhouseCoopers (PwC) resigning for two of the companies. While the auditors had said they did not receive satisfactory replies from the companies for their queries, the company has put out a statement claiming they had sent in their replies to all the queries and that it was PwC that failed to hold a meeting with the company‚Äôs audit committee to iron out the differences.
Whatever may be the truth in these statements from the company and the former auditors of the company, the fact remains that the rating agencies like ICRA, Care Ratings and Brickwork Ratings have been downgrading the group companies in recent times.
Some amount of debt repayments and other moves made by the management have helped the stocks of these companies to register an increase in the markets, possibly the only good news for Anil Ambani in these troubled times.
Elder brother Mukesh Ambani has extended a helping hand by paying off a debt, non-payment of which would have sent Anil to prison. The brothers entered into an agreement in 2017 where the telecommunications assets would have been transferred to Reliance Jio Infocomm of the Mukesh Ambani-led Reliance Group but had to be scrapped since the government wanted the buyer company to give a guarantee that all dues of Reliance Communications under Anil Ambani will be settled by them. The agreement fell through on this score.
Anil Ambani has however gone on record assuring that his companies will meet all debt obligations and bounce back.