RCom to submit asset sale proposal for debt resolution through NCLT
04 February 2019
Anil Ambani-promoted Reliance Communications (RCom) on Sunday said it would propose the same debt resolution plan with the National Company Law Tribunal as was earlier pursued with creditors.
RCom’s management last week said it will propose a plan to sell its telecom infrastructure assets, airwaves and real estate to resolve its debt and seek fast-track resolution through the National Company Law Tribunal (NCLT).
While RCom’s asset sale plan has been stuck in legal and regulatory complexities, lenders are losing patience because of non-receipt of proceeds from the proposed asset monetisation plans. There has also been no progress in the overall debt resolution process.
RCom said after the passage of 12 months and over 45 meetings, the 40-odd lenders, both Indian and foreign, have failed to arrive at 100 per cent consensus on all important issues, as mandated by the RBI.
RCom’s management said there was no alternative than propose a similar debt resolution plan in the NCLT process, as was earlier being pursued outside NCLT.
The company’s current debt to lenders stands at Rs38,000 crore, including Rs19,800 crore it owes to local lenders and Rs18,200 crore to foreign lenders, according to a Reuters report.
The company said a similar plan proposed earlier could not be implemented because of a lack of regulatory approvals and legal challenges.
Once the plan is approved, RCom said its “substantial unsustainable debt and liabilities” would be extinguished under the NCLT process and it would be able to overcome challenges raised by minority lenders.
RCom has also been handicapped by a string of losses during a price war triggered by the market entry of Reliance Industries.