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Anil Ambani says R-ADAG repaid Rs 35,000 crore debt in 14 months despite odds, no liquidity support

FE Online
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Anil Ambani ostensibly sought to reassure investors and debtors on Tuesday, saying that his Reliance-ADAG has serviced debt obligations worth Rs 35,000 crore in the last 14 months since April 2018 despite severe odds, and remains committed to meeting all future obligations. In a brief media conference call, R-ADAG Chairman Anil Ambani said that debt repayments have been made across the group companies including Reliance Power, Reliance Capital and Reliance Infra. He added that the group has serviced these debt repayments in the face of “insurmountable odds” and most challenging financial conditions in the country.

R-ADAG companies have made the debt repayments of Rs 35,000 crore, including Rs 25,000 crore in principle, entirely by way of asset monetisation, despite lack of any support from the financial system, Anil Ambani said. During these 14 months, lenders of all categories including banks, NBFCs, funds, etc, have provided zero net additional liquidity, he added. In a further bid to reassure Reliance-ADAG’s investors and debtors, Anil Ambani said that the group remains fully committed to meet all future debt servicing obligations.

Anil Ambani’s statement would reassure lenders, said Deven Choksey, MD, K R Choksey Investment Managers, to CNBC TV18. The media appearance would give a message that Anil Ambani is there and the group is taking action to service its debt obligations, Choksey said. However, Choksey said he’s not buying any shares in Anil Ambani group companies.

Another investment expert Sanjiv Bhasin was less charitable. “It should allay little bit of fear of the banks which have holding, but nothing aside from that,” Sanjiv Bhasin, EVP markets and corporate affairs, IIFL Securities said to ET Now. Reliance Anil Ambani group companies shareholders “need to be worried,” Sanjeev Bhasin said referring to the fall in the market capitalisation of these companies to about one-tenth of the peak valuations. “It tells there is only distress,” he added. “Yes, Anil Ambani is there and he is servicing his debt, but what s the return on equity or return on capital the shareholders have got? I think, zilch. So, it s a glass half full half empty,” Sanjiv Bhasin said.

Anil Ambani group has been selling assets of late, with an aim to pare huge debt. Recently, Anil Ambani sold Big FM to Jagran Prakashan-owned Music Broadcast Ltd. (MBL), which already owns the Radio City FM channel. The group also made exit from the asset management business by selling shares in the joint venture to Japanese partner Nippon Life Insurance Co. Reliance Infrastructure (R-Infra) has already sold its Mumbai utility to the Adani group.