Rcom ringing the tune of 'asset sale' again!

In an otherwise lackluster market, Reliance Communication or Rcom is doing pretty well for itself. The stock price is up around 3% at Rs.36 levels and figures out amongst the top gainers on the BSE. The price is closer to its 52-week low of Rs.34.35 than the high of Rs.91.80.

The stock is up on unconfirmed news that it’s deal to sell 100% of its towers, owned by subsidiary Reliance Infratel to Brookfield is sealed. The report goes on to say that a definitive agreement has been signed and Rcom is likely to receive Rs.11,000 crore as upfront payment  and it might get around Rs.9000 crore over the next 3.5 years, based on the performance.

December seems to be the month when Rcom news about tower sale seems to crop up like a ritual. Last year, the company had signed a deal with Tillman Global and TPG to sell the towers for Rs.21,500 crore but the deal fell through on account of differences in valuations. Hope this time, this deal is for real and that explains why the stock price is showing a muted optimism.

The company is sitting on debt of around Rs.42,000 crore and the sale is imperative to bring down this burden.