HEADLINES:
December 15 2019
Reliance Communications goes to National Company Law Tribunal for insolvency
02 February 2019

₹20,000-crore deal with Jio called off.

Anil Ambani-led Reliance Communications (RCom), with a debt of ₹46,000 crore, has decided to file for insolvency proceedings at National Company Law Tribunal (NCLT) Mumbai to seek fast-track resolution.

RCom had been unable to sell its spectrum and tower assets to Reliance Jio for ₹20,000 crore “The board of directors of RCom today [Friday] reviewed the progress of the company’s debt resolution plans since the invocation of SDR on June 2, 2017. The board noted that, despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway,” said RCom in a statement, adding that the board decided that the company would seek fast-track resolution through NCLT.

This means the ₹20,000- crore deal with Reliance Jio has been called off and Reliance Jio would have to bid again for RCom’s assets through the NCLT-monitored process.

“The NCLT will appoint an IRP, who will call fresh bids for RCom assets. Jio is likely to bid for spectrum and tower assets as its network runs on them. However, it is to be seen if a new bidder will join the race,” a source told The Hindu.

The company was unable to get 100% approvals and consensus, as mandated by RBI’s February 12, 2018 circular, on all important issues, amongst over 40 lenders, Indian and foreign, despite the passage of 12 months and over 45 meetings, forcing it to go for insolvency proceedings at NCLT.

“This unfortunate outcome is attributable to pendency of numerous legal issues at high courts, TDSAT and Supreme Court impeding progress at various stages,” said a company statement adding that the board believes this course of action will be in the best interests of all stakeholders, ensuring comprehensive debt resolution in a final, transparent and time bound manner within the prescribed 270 days.

RCom and only two of its subsidiaries, Reliance Telecom Ltd. and Reliance Infratel Ltd., will take appropriate steps shortly to implement the board decision. There will be no impact on the business and operations of other subsidiaries of the company, including inter alia GCX, Reliance IDC, the statement added.

 

 

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