Reliance Communications chief Anil Ambani not to draw any salary this financial yearAnil Ambani-led Reliance Communications is reeling under debts and faced credit downgrades over its inability to pay back loans
With his company reeling under financial duress on account of its huge debt and credit downgrades, Chairman Anil Ambani today voluntarily decided to not take any salary or commission from Reliance Communications in the current financial year.
"The decision is part of company promoters' commitment to strategic transformation programme. RCom management also steps up, follows Chairman's lead to ensure time-bound execution," said a press statement.
"RCom management team on-board has also decided to defer personal pay by up to 21 days. Measures will remain in place till December 2017," it added.
The company has defaulted on some of the payments to lenders and it has received time till December for strategic restructuring plan under which it will get a 7-month standstill to service loans amounting to Rs. 45,000 crore. Ambani has said that the debt burden will be reduced to Rs. 20,000 crore with two deals by September, before the December deadline given by the lenders.
RCom said Aircel and Brookfield deals are targeted to close by September 30, 2017 subject to approvals and will reduce debt by nearly 60 per cent or about Rs. 25,000 crore.
The company has been reeling under a slew of rating downgrades over the last few days, battering its stock. Shares of RCom were trading at 18.2 a unit, up 0.83 per cent, in the afternoon on BSE.
Early this month, rating agencies Fitch and Moody's downgraded credit rating of Reliance Communications on account of its fragile liquidity position and limited ability to pay back debt.
Fitch downgraded RCom to the lowest category with some hope for recovery of principal or interest amount while Moody's Investors Service downgraded the firm to the second lowest category.
In a press conference on June 2, Reliance Communications chairman Anil Ambani announced the new RCom-Aircel merged wireless company Aircom. RCom will hold 50 per cent stake in Aircom.