Anil Ambani's Reliance Communications to pursue similar resolution plan in NCLT as proposed earlier

The two firms consequently announced an extension of the deals validity early in January this year.

Published: 04th February 2019 08:45 AM  |   Last Updated: 04th February 2019 08:48 AM   |  A+A-

Anil Ambani

Reliance Group chairman Anil Ambani (File | PTI)

By Express News Service

NEW DELHI: Anil Ambani-led Reliance Communications (RCom) on Sunday said it would propose a resolution plan to the National Company Law Tribunal (NCLT) that would be largely similar to the one it has been proposing outside the courts. RCom also expressed confidence that its move to go via the NCLT process would enable a fast-track resolution free of challenges and uncertainties. 

While the company has been unable to move ahead with its proposed asset monetisation plan due to several hurdles, including opposition from minority lenders and conditions laid out by the Department of Telecom, its statement on Sunday said that the NCLT process would enable it to overcome these challenges.

“The company has been faced with various challenges, 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,” it said. 

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RCom also added that the NCLT’s rules requiring only 66 per cent lenders’ approval would help get past minority lenders’ objections. “Challenges raised by unreasonable minority lenders can be now be overcome through the NCLT’s 66% majority rule, against the 100% approvals rule outside NCLT,” it noted. 

The list of measures RCom proposes to undertake as part of its debt resolution plan include the sale of all telecom infrastructure assets and spectrum, strategic monetisation of GCX, IDC & Indian Enterprise businesses and the development of 30 million sq ft at the Dhirubhai Ambani Knowledge City complex. Alongside these moves, it also proposes to sell a few other real estate assets. 

“Also,the RCOM Board expects substantial unsustainable debt and liabilities to stand extinguished under the NCLT process,” the company noted, adding that its board would actively participate in the NCLT resolution process, but without voting rights as clarified by a recent judgment of the Supreme Court. “The Board remains confident on future prospects as a going concern under a new ownership on completion of the NCLT resolution process,” it said. 

According to reports, RCom is said to have an aggregate debt of over Rs 36,000 crore excluding interest obligations. It has been trying to sell all telecom infrastructure assets and spectrum, with simultaneous attempts to monetise other assets to clear its dues. But with over 18 months gone since the initial announcement, lenders have not received the proceeds from any of these proposed measures. RCom’s attempts to sell its spectrum assets to Mukesh Ambani’s Reliance Jio failed to go through due to DoT’s objection that the deal didn’t meet airwave trading norms. 

The two firms consequently announced an extension of the deals validity early in January this year. The roadblock in getting the deal processed is delaying around Rs 975 crore expected to be realised from the deal, which RCom has stated will be used to pay Rs 550 crore due to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel.

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