Rcom jumps on property sale news

Reliance Communication (Rcom) is buzzing loud and clear today. The stock price rose almost 6% to Rs.20.90.

Any news from the company which talks about initiation of steps to reduce debt by selling assets is greeted with a lot of cheer.

There was news on Livemint that Rcom plans to sell two of its prime properties in Mumbai and Delhi and raise Rs.10,000 crore to be used to pare debt. The stock exchange had asked for a clarification on the same and the company confirmed this news saying it that has initiated the monetization programme for its real estate properties.

Rcom has put out ads in Economic Times for both and has hired real estate services company JLL to broker a deal for its corporate office in central Delhi and Dhirubhai Ambani Knowledge City (DAKC) in Mumbai. 

The Delhi property, Reliance Centre on Maharaja Ranjit Singh Marg, is spread over approximately 3.7 acre and estimated to be valued at up to Rs800 crore. The constructed area of the building is 318,759 sq. ft.

The Mumbai property, DAKC, is spread over 133 acres in Navi Mumbai, and has a development potential of 13 million sq. ft of which 2 million sq.feet has been developed. It also includes a captive residential area. It comprises several office buildings and residential blocks, the Millennium Business Park, houses a lake, helipads, hospitals, a temple and even a plush 250-room guest house.

The company hopes to bring down debt by Rs.20,000 crore by September – money to come from sale of these two properties and that coming from merger with Aircel and sale of tower assets to Brookfield.