MUMBAI : The upcoming celebrations for the Chinese New Year, that begin on 25 January, have stalled a final decision on the insolvency resolution of Anil Ambani’s Reliance Communications (RCom). RCom’s Chinese lenders, who hold about a third of the company’s bad debt, will be unavailable to vote while the festivities are on.

To accommodate these lenders, the CoC is now extending by 2 weeks the deadline for RCom’s insolvency proceedings.

A member of RCom’s committee of creditors (CoC) told Mint, on condition of anonymity, that the preferred resolution plan was originally scheduled to be put to vote on 30 January, so that a winning bidder could be decided before 3 February, the deadline for the 270-day Insolvency and Bankruptcy Code (IBC) process for the company.

“China starts to shut down from January 23 onwards to about February 4," the CoC member told Mint. “So we won’t be able to meet the 270-day deadline. We will need 2 more weeks. The Chinese lenders account for 32% of the overall financial creditors."

Chinese lenders to RCom include China Development Bank, Exim Bank of China and Industrial & Commercial Bank of China, to whom RCom owes about Rs15,053 crore of its total Rs49,233 crore in outstanding dues.

Mint had reported on 15 January that the creditors’ group of bankrupt RCom appears split down the middle on how to go about the resolution process. While domestic banks have leaned in favour of selling the assets in parts to Reliance Jio and UV Asset Reconstruction Co. (ARC) to quickly complete the resolution process and meet the insolvency deadline, foreign lenders want to negotiate harder with bidders to recover a higher value from the sale of assets.

Over the last five days, the CoC has been working closely with resolution applicants to improve the terms of their offers. So far, Mukesh Ambani’s Reliance Jio has made the highest offer of Rs3720 crore for Reliance Infratel, which houses RCom’s tower and optic fibre assets. Jio has also made a conditional offer of 800 crore for Reliance Infratel’s holding in Dhirubhai Ambani Knowledge City (DAKC), subject to the sale of the property going through. Delhi-based UV Asset Reconstruction Company (UVARC) has offered staggered payments of 16,000 crore for the spectrum, real estate (including DAKC), media convergence nodes, enterprise, and data centre businesses of RCom. Both resolution applicants marginally improved on their original offers after last week’s meetings with the CoC.

Through last week’s discussions, the CoC saw deep rifts emerging on how to resolve RCom bankruptcy proceedings. A second member of the CoC, that Mint spoke with, said they would prefer pushing resolution applicants to improve further on their offers.

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