RCom to move NCLT to offload assets, repay debt

Irving Hamilton
February 3, 2019

".despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetization plans, and the overall debt resolution process is yet to make any headway", the company said today.

RCom said "despite the passage of 12 months and over 45 meetings" it has become hard to get "100% approvals and consensus". And the NCLT had also appointed Interim Resolution Professionals (IRPs) to initiate corporate Insolvency Resolution Process in the same month.

"The Board decided that the Company will seek fast track resolution through NCLT, Mumbai", RCom said in a statement Friday. Jio is likely to bid for spectrum and tower assets as its network runs on them.

In a statement RCOM said that 100 per cent approval of all its 40 lenders had been impossible and the Board was of the opinion that resolution through the NCLT framework would be in the best interests of all stakeholders.

To recall, a year ago in December, Department of Telecom rejected Rcom and Jio spectrum trading deal as it does not conform to its guidelines.

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The decision comes at a time when RCom has failed to abide with a Supreme Court order given in October to repay its dues of Rs. 550 crore plus interest towards telecom equipment manufacturer Ericsson India Pvt.

The NCLT, on the request of RCom, had granted it time to clear dues to avoid insolvency proceedings. "It is public money, and we will take it from whoever owns it in case the corporate guarantee that RCom is providing us does not prove to be sufficient", a senior official at the telecom department had said, a stand which led to the collapse of the deal.

But the telco - which was forced to shut its wireless operations under financial pressure late 2017 - moved the National Company Law Appellate Tribunal (NCLAT) and averted bankruptcy proceedings by citing its deals with Jio and Brookfield, and agreed to pay Ericsson Rs550 crore as a settlement. Jio had petitioned DoT to insulate it from any dues arising towards RCom for the period prior to the clearance of the deal.

The apex court had backed DoT's contention and had asked RCom and Jio to decide on the matter.

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