Reliance Group ‘set to lose control’ of RCom as debt converted to 51% stake By: Alan Burkitt-Gray Published on: Tuesday, October 31, 2017 RCom to hand over 51% to lenders but rival Reliance Jio expected to make a bid for stake India’s Reliance Group is on the verge of losing control of its mobile telecoms operation as it prepares to hand over majority control to lenders.Reliance Communications (RCom) owes 170 billion rupees ($2.6 billion) and its parent plans to hand over 51% of the company in a debt-for-equity swap.The move will leave RCom with the Global Cloud Xchange (GCX) business, which includes data centres and subsea cables, plus an enterprise and wholesale business. RCom said that shareholders “have already approved issuance of equity shares to lenders by conversion of loans” at the annual meeting in September. About $1 billion in debt will be converted to equity, with the group holding falling to around 26%. However, commentators in India expect rival Reliance Industries (RIL) to bid for the lenders’ 51% stake in RCom and merge it with its own Reliance Jio mobile business. The two companies are run by rival brothers, each of whom inherited some of the businesses set up by their father Anil Ambani. RCom executive director Puneet Garg told The Hindu newspaper that Jio “don’t want to deal directly but have shown interest in bidding for many of our assets in a transparent manner”. RCom had been planning to merge its mobile operations with Aircel, but that deal was called off earlier this month – in the process killing off a plan to sell off its tower business to Canadian company Brookfield. RCom has hired Indian investment bank SBI Capital Markets to advise on selling off its assets. The company is saying that its debt resolution plan will not require lenders to write off loans – but it will see a major restructuring of the operator.