RCom unit seeks extension from holders as maturity looms for dollar bonds

A unit of Reliance Communications Ltd., tycoon Anil Ambani’s distressed telecom firm, is seeking an extension from holders of its dollar-denominated bonds maturing Aug. 1, the company’s spokesman said.

Global Cloud Xchange is in discussions with holders of its 7% $350 million notes for a deal that would provide the issuer more time to discuss options on the maturity of the senior secured notes, the spokesman said in a statement. The move to seek a forbearance pact with investors follows the failure of a deal with a prospective lender to arrange a private loan for repaying the notes at par on maturity.

GCX’s attempts for a pact with bondholders comes on the heels of Suzlon Energy Ltd., an Indian wind-turbine maker, missing repayment of $172 million outstanding convertible notes last week. Rising defaults by domestic companies add to cracks in India’s credit markets that have worsened since the crisis at IL&FS Group last year. Parent RCom, which slid into bankruptcy earlier this year, is seeking to find buyers for its assets to repay debt.

“In parallel, GCX is also continuing with its contingency planning,” the spokesman said.

Reliance Communications (RCOM)