Reliance Communications has filed its resolution plan with the bankruptcy court, the last leg before its fibre and spectrum go to UVARCL and towers to Reliance Jio.
“Reliance Communications Limited (“RCOM”) in accordance with the stipulations contained in Regulation 30 of the SEBI ….hereby informs …that resolution professional of RCOM has duly filed the resolution plan as approved by the CoC with the… National Company Law Tribunal, Mumbai Bench on March 6, 2020 in accordance with Section 30(6) of the Insolvency and Bankruptcy Code, 2016,” said the company in a regulatory filing on Saturday.
Last week , committee of creditors (CoC) unanimously declared declared UVARCL and Jio to be the preferred bidders for RCom’s assets after lenders overwhelmingly voted in favour of the resolution plans submitted by these companies.
According to the plan approved by lenders RCom and its subsidiary Reliance Telecom Infrastructure Ltd (RTIL), will go to UVARC whereas the tower company Reliance Infratel will go to Reliance Jio for a total consideration of between Rs 20,000 crore to Rs 23,000 crore to be paid over a period of seven years.
The assets of bankrupt telco, which was once led by Anil Ambani and were put up for sale included airwaves in the 850 MHz band in 14 of India’s 22 telecom circles (RCom), about 43,000 telecom towers (Reliance Infratel), some fibre and data centres (Reliance Telecom).
The UVARCL offer also includes a zero coupon bond which is redeemable after seven years depending on the recovery made by the company by selling Rcom’s assets. If a recovery is not made within seven years, banks have the option to convert a part of the debt into equity. Jio had bid Rs 3,600 crore, but only for the tower assets.
At the time of filing for bankruptcy, RCom had debt of Rs 46,000 crore, with 53 financial creditors — including local and foreign banks, nonbanking financial companies and funds — laying claims.
Deloitte is the resolution professional for RCom and its units
Besides banks, operational creditors such as tower companies, equipment vendors and DoT have claimed nearly Rs 30,000 crore in dues, of which over Rs 21,000 crore has been verified.
RCom was forced to shut its wireless operations late 2017, hurt by mounting debt and widening losses amid intense competition in the telecom sector after Jio’s entry in September 2016. It tried to sell its wireless assets, such as spectrum and towers, to Jio, but failed due to a slew of legal cases. This forced the telco to opt for insolvency proceedings under the IBC in May 2019.
Source: The Economics Times