The dedicated insolvency court will hear the resolution plan of bankrupt telco Reliance Communications NSE -3.51 % (RCom ) and its units on Wednesday.
The National Company Law Tribunal (NCLT) will decide on August 5 if UV Asset Resolution Co Ltd (UVARCL) and Reliance Jio Infocomm (Jio) are the buyers of RCom’s assets.
The two firms have been overwhelmingly voted in favour of the resolution plans submitted by UVARCL and Jio by RCom’s lenders.
UVARCL is all set to take over bankrupt telco Aircel’s assets after it received NCLT approval and is now awaiting some regulatory nods.
According to the plan approved by lenders, RCom and its subsidiary Reliance Telecom Infrastructure Ltd (RTIL), will go to UVARCL 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).
At the time of filing for bankruptcy, RCom had debt of Rs 46,000 crore, with 53 financial creditors — including local and foreign banks, non-banking financial companies and funds — laying claims.
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.
