- With Anil Ambani’s Reliance Communications (RCom) filing for insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), the Department of Telecommunication (DoT) is likely to take a hit over its claim of Rs 2,900 crore, legal expert Punit Dutt Tyagi said. RCom on Friday said that it has decided to file for insolvency as the proposed asset monetisation plan failed to make any progress.
The company has decided to approach NCLT under Section 10 of the IBC and the resolution process would remain the same as in the case of proceedings initiated by an operational creditor. With RCom undergoing insolvency, DoT, which is an operational creditor, is likely to be paid after financial creditors as per the IBC rules.
The decision to move National Company Law Tribunal (NCLT) has been taken following DoT’s refusal to clear the spectrum sale deal between RCom and Reliance Jio. RCom, which owes DoT Rs 2,900 crore and had given a corporate guarantee of Rs 1,400 crore in compliance with the Supreme Court order in order to get the department’s approval to proceed with the spectrum sale plan.
However, with Mukesh Ambani’s Reliance Jio reportedly refusing to take any payment liability of RCom after the deal, DoT refused to give its nod.
The department had been of the opinion that under the circumstance where both the parties are not in the position to take the responsibility of payment of dues, the telecom department cannot take the deal on record, news agency PTI reported.
Last year, RCom signed a deal Reliance Jio for sale of wireless spectrum, tower, fibre, and media convergence nodes assets – the proceeds of which were to be used to clear Rs 45,000 crore debt. So far, the company has completed the sale of optical fibre assets worth Rs 3,000 crore and sale of its media convergence nodes worth Rs 2,000 crore.
Source: Economic Times, February 3,2019