Reliance Communications announced on 03 February 2019 that its management will propose a similar Debt Resolution Plan in the National Company Law Tribunal (NCLT) process, as was earlier being pursued outside NCLT. Key elements of the Debt Resolution Plan remain unchanged, including:
Sale of all telecom infrastructure assets and spectrum;
Strategic monetisation of GCX, IDC & Indian Enterprise Business; &
Development of 30 million sq ft at the Dhirubhai Ambani Knowledge City complex and sale of other real estate assets.
The Company has been faced with various mostly, untenable issues raised by the Department of Telecommunications. These issues inter alia resulted in numerous legal issues at High Courts, TDSAT and the Hon’ble Supreme Court, which frustrated the existing plan and can now be addressed/resolved under the NCLT process.
Further, challenges raised by unreasonable minority lenders can be now be overcome through the NCLT’s 66% majority rule, against the 100% approvals rule outside NCLT.
Also,the RCOM Board expects substantial unsustainable debt and liabilities to stand extinguished under the NCLT process.
The RCOM Board will actively participate (without voting rights) in the NCLT resolution process, as clarified by a recent judgment of Hon’ble Supreme Court. The Board also expects strong support from and requisite approvals of the Creditors’ Committee, Resolution Professionals and NCLT in the interest of all stakeholders.
The RCOM Board therefore sees a fast-track NCLT resolution in 2019, free of all uncertainties and challenges. The Board remains confident on future prospects as a going concern under a new ownership on completion of the NCLT resolution process.
SOURCE: Business Standards, February 4, 2019