Says fresh proposal under NCLT is similar to earlier plan, which was affected by legal tangles
Reliance Communications (RCom), with outstanding debt of ₹42,000 crore, plans to propose a similar Debt Resolution Plan in the National Company Law Tribunal (NCLT) process, as was earlier being pursued outside NCLT to repay dues. It then plans to exit the telecommunications business altogether.
Under the NCLT, the firm aims to overcome challenges raised by the need for 100% approvals by all lenders earlier. Within the ambit of NCLT, a 66% majority rule will help quicken resolution, said an RCom spokesperson.
The company’s Debt Resolution Plan under NCLT will include sale of all telecom infrastructure assets and spectrum, strategic monetisation of subsidiaries GCX, IDC and Indian Enterprise Business, and development of 30 million sq ft at the Dhirubhai Ambani Knowledge City (DAKC) complex and sale of other real estate assets, he said.
RCom has total outstanding debt of ₹42,000 crore, of which ₹19,800 crore is owed to Indian lenders, with SBI alone being owed over ₹4,500 crore. Of the rest, ₹18,200 crore is owed to international lenders, led by Chinese banks.
“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,” said the spokesperson.
The board of RCom expects substantial unsustainable debt and liabilities to stand extinguished under the NCLT process, he added. “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,” said a company statement
In December 2017, the firm had entered into a pact with Reliance Jio to sell its telco assets for ₹25,000 crore. However, it could sell assets worth ₹5,000 crore only. The remaining ₹20,000 crore in the deal with Reliance Jio fell through as it failed to get DoT approval for the sale of spectrum. Reliance Jio had refused to take responsibilities for the past dues of RCom.
“What was till now being pursued under SDR will now be pursued under NCLT. This will help us in time-bound resolution and overcome through the NCLT’s 66% majority rule, against the 100% lenders approvals rule outside,” a senior RCom official told The Hindu.