Reliance Communications, India's fourth-largest telecom operator, on Tuesday said it will raise Rs 4,300 crore by selling securities to institutional investors and promoters to trim debt.The qualified institutional placement (QIP) portion, which opened, will give the company Rs 3,000 crore, sources said.
The Mumbai-based firm will raise $500 million (Rs 3,000 crore) through the QIP and Rs 1,300 crore through a preferential allotment of warrants to promoter groups at Rs 150 each, they added.The company's board of directors passed a resolution authorisingthe opening of the QIP from June 24, RCom said in a BSE filing. It also approved the issue and allotment of 8.67 crore warrants to the promoters, entitling them to the same amount of equity shares.
The offer price of the QIP has been fixed at Rs 142.13 a share, which is a 5 per cent discount to the floor price of Rs 149.61, based on the formula prescribed by Sebi, it added.
RCom shares rose 0.57 per cent to close at Rs 151.35 on the BSE.“The proceeds of the QIP offering and the preferential allotment will be used primarily for repayment of debt and deleveraging the balance sheet of the company,” RCom said in the filing.RCom had a net debt of Rs 40,177.6 crore in the quarter ended March 31.
The RCom filing said the promoters and promoter groupentities would be entitled to as many as 8.67 crore shares (up to about Rs 1,300 crore or $ 217 million) under the preferential allotment.
“The promoter/promoter group entities will be required to make payment of 50 per cent of the subscription amount on the date of allotment of the warrants and the balance 50 per cent will be payable on or before March 31, 2015.” The firm said in the filing that the floor price for the preferential allotment, based on the formula by Sebi, has been fixed at Rs 150 a share.
For the quarter ended March 31, RCom posted a 48.5 per cent dip in consolidated net profit to Rs 156 crore from a year earlier. Revenue increased 5.36 per cent to Rs 5,405 crore