‘Reliance Comm told bondholders they’re on par with lenders’

Reliance Communications (RCom), which earlier this month defaulted on dollar notes, told bondholders that they would be treated the same as bank lenders in terms of their ability to recover funds, according to Citigroup.

The mobile phone operator controlled by billionaire Anil Ambani, whose failure to pay interest on the dollar notes comes as a high-profile test of the country's new bankruptcy laws, held the call on Monday, Citigroup said in a note to clients dated November 28.

That came amid news that China Development Bank was said to have asked a tribunal to place the company under insolvency proceedings.

"One of the key takeaways for us was the company's intent to treat the bondholders pari-passu to the other secured lenders," Citigroup said in the note. One of the triggers for the call was to encourage bondholders to form a committee, it said. Intense price competition has driven down earnings as larger mobile companies such as Bharti Airtel and the deep-pocketed Reliance Jio Infocomm vie for market share.

Reliance Communications (RCOM)