MUMBAI, June 2 — Reliance Communications Ltd’s plunge has yet to drag down the fortune of its chairman Anil Ambani.
The 57-year-old tycoon’s net worth has inched up this year, even as shares of his wireless unit have plummeted 39 per cent, wiping about 33.1 billion rupees (RM2.19 billion) from its market value. At the same time, the Reliance Group founder’s wealth has swelled by about US$82 million (RM351 million) to US$2.7 billion, according to Bloomberg’s Billionaires Index.
Gains from Reliance Group’s financial services arm Reliance Capital Ltd. and Reliance Power Ltd. have outstripped the erosion at a telecom unit battered by investors questioning its creditworthiness.
The turbulence at Rcom, as the phone unit is known, has come at a time when the group’s Reliance Infrastructure Ltd is planning to list a trust with some road assets and its Reliance Defence and Engineering Ltd business is working toward becoming a new profit pillar by winning weapons contracts.
A Reliance Group spokesman didn’t immediately respond to an emailed request for comment.
The Ambani family conglomerate entered the telecom industry in 2002 before a dispute led the group to divide assets in 2005 between Anil and older brother Mukesh, now India’s richest person.
Reliance Communications — which went to Anil — has struggled in an increasingly competitive market, particularly after Mukesh’s Reliance Jio Infocomm Ltd stormed into the market last year with offers of free services.
* Reliance Communications rose 4.3 per cent to 20.75 rupees at the close of trading yesterday and is this year’s worst-performing stock on the S&P BSE 200 Index.
* The company is in discussions with Chinese lenders about a waiver on interest payments on loans of about US$1 billion until September, according to people familiar with the matter, who aren’t authorised to speak publicly and asked not to be identified. The credit rating for its rupee-denominated bonds and loans were slashed to D on May 30 by Indian rating firms ICRA Ltd and CARE Ratings, their lowest score indicating default or that default is expected soon.
* The telecom unit has said it’s confident it could repay 250 billion rupees of debt with proceeds from sales of its towers and a 50 per cent stake in its wireless business. It has also said it’s looking to monetise some of its land parcels.
* An outright default is unlikely at this stage as Reliance Communications has been continuously seeking covenant waivers from its lenders, HSBC Holdings Plc analysts Anna Zhang and Keith Chan wrote in a May 31 note. — Bloomberg