RCom's committee of creditors likely to vote on resolution plan on Feb 24

The committee of creditors (CoC) tasked with finding buyers for the Anil Ambani-promoted Reliance Communications (RCom) and its two arms is expected to vote on a resolution plan on February 24. 

The resolution professional (RP) is slated to submit the resolution plan to the Mumbai Bench of the National Company Law Tribunal (NCLT) on March 5, 2020, according to the people involved in the process of sale of the firms — RCom, Reliance Telecom Infrastructure, and Reliance Infratel, which houses the tower and fibre assets.

The consortium of 38 lenders is hoping to recover a substantial portion of the secured debt worth Rs 33,000 crore from the process. Lenders to Bhushan Steel and Essar Steel had recovered 63 per cent and 60 per cent, respectively, according to data available on the website of Insolvency and Bankruptcy Board of India (IBBI). 

Mukesh Ambani’s Reliance Jio Infocomm and Delhi-based UV Asset Reconstruction Company (UVARC) have emerged the highest bidders for the assets of RCom and its subsidiaries. The combined bid amount is Rs 21,000 crore.

RCom was referred to the NCLT in May last year after an offer from Reliance Jio to buy its assets did not find favour with the creditors. The conditions imposed by the Department of Telecommunications (DoT) too were a hindrance. 

According to the people close to the matter, Jio, is willing to pay Rs 4,700 crore for the tower and fibre assets of Reliance Infratel. UVARC has offered to pay about Rs 16,000 crore for the spectrum, real estate, and enterprise and data centre businesses of RCom and Reliance Telecom, which houses these assets. 

The bidders are believed to have committed themselves to paying 30 per cent of the proceeds within 90 days from the completion of the process.

The banks are expecting that they will be able to salvage much more than what they did from Aircel, where the winning bid was only for Rs 150 crore. The deal is still not cleared. 

Reliance Jio last year signed an agreement to buy RCom’s assets including 43,000 telecom towers, 178,000 kilometres of fibre network across the country, and spectrum, for around Rs 25,000 crore. However, the deal did not fructify because the DoT insisted that Jio’s or RCom’s promoters give an undertaking that they would be responsible for clearing the dues of the past. Relinace Jio refused to give an undertaking. 

Even the creditors could not reach a consensus on whether to clear the asset sale. Consequently, RCom went to the NCLT.

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