In a bid to rescue himself from debts, business Tycoon Anil Ambani is said to be planning to sell assets worth Rs 21,700 crore (USD 3.2 billion). Ambani is planning to sell assets from roads to radio stations in a bid to cut debt, claim reports.
According to Bloomberg, the breakdown of asset sales would be as follows- Reliance Infrastructure is seeking Rs 9,000 crore from the sale of nine road projects, Reliance Capital aims to raise Rs 1,200 crore by selling its radio unit, and Rs 11,500 crore from monetizing its holdings in the financial business.
Anil Ambani's major business interests in entertainment include 44 FM radio stations, nationwide DTH business, animation studios, and several multiplex cinemas throughout India. After his father's death in 2002, Anil Ambani took over the reins of Reliance Group with interests in telecom, entertainment, financial services, power, and infrastructure. Ambani is also credited with India's largest IPO, that of Reliance Power, which in 2008 was subscribed in less than 60 seconds, the fastest in the history of Indian capital markets to date.
But now, Ambani is waging a war on debt. He said on June 11 that his Reliance Group repaid Rs 35,000 crore in the past 14 months through asset disposals. According to Bloomberg, a large pile remains. The four biggest group companies still have about Rs. 93,900 crore of debt. And that excludes Reliance Communications Ltd., Ambani's former flagship firm that recently slipped into insolvency.
CARE Ratings had pointed to delays in divestments at Reliance Capital in an April statement while cutting the financier's rating. Reliance Communications' 2017 deal to sell its telecom assets to Reliance Jio Infocomm Ltd., owned by Anil's elder brother Mukesh Ambani was scrapped earlier this year. Mathew Antony, managing partner at Aditya Consulting told Bloomberg, "The lack of timely realizations in the asset sales is sounding alarms for most of the Anil Ambani-led companies."
A spokesman told Bloomberg, Reliance Infrastructure is in advanced talks to sell its nine road projects. It pared its consolidated debt by 45 percent over a year to Rs. 17,770 crore as of end-March.
Anil Ambani, chairman of Anil Dhirubhai Ambani Group (ADAG) in June, said that the group was fully committed to meeting all its future debt servicing obligations in a timely manner through asset sales that are already at various stages of implementation. He reiterated that the group has already serviced the debt of Rs 35,000 crore to its various lenders in the past 14 months, including Rs 24,800 crore in principal payments and Rs 10,600 crore in interest payments. Going forward, the group will become capital light, with minimum debt and high equity, he added. The servicing of the debt was made through monetisation of assets of Reliance Capital Ltd, Reliance Infrastructure Ltd, and Reliance Power Ltd, he said. “All these sales have been made against insurmountable odds," said Ambani, while addressing reporters in a conference call.