DoT objects to resolution plans of RCom, Reliance Telecom1 min read . Updated: 19 Aug 2020, 07:45 PM IST
DoT has also been contesting the proceeds it would receive as an operational creditor to the insolvent company under the current resolution plan
Mumbai: The department of telecommunications (DoT) on Wednesday objected to resolution plans of Reliance Communications Ltd (RCom) and its subsidiary Reliance Telecom Ltd (RTL) on grounds that it was not given a ‘fair’ treatment in these proposals, said a person aware of the development.
“The counsel for DoT said that he has received instructions from his client on the matter. He was then asked to file an affidavit detailing the objection," said the person cited above, adding that the Mumbai bench of the National Company Law Tribunal (NCLT) will next hear the case on 21 August.
DoT has also been contesting the proceeds it would receive as an operational creditor to the insolvent company under the current resolution plan. If it is indeed classified as an operational creditor, the DoT will be pushed lower down the pecking order in trying to recover its dues under insolvency proceedings.
For instance, the winning bidder for RCom’s spectrum, real estate, enterprise and data centre business, UV Asset Reconstruction Company (UV ARC), has offered ₹14,000 crore for all of these assets. As an operational creditor, the DoT is likely to recover next to nothing on its outstanding dues of ₹25,199 crore from RCom if this resolution plan is approved.
This March, the committee of creditors to RCom cleared the sale of the company’s tower and fibre assets to Reliance Jio Infocomm for ₹4,700 crore while UV ARC emerged the highest bidder for the remaining assets, including spectrum. According to DoT estimates, RCom owes ₹25,199 crore, including spectrum usage charges (SUC) and license fees, which is nearly half of ₹49,054 crore calculated under the company's insolvency proceedings.
Meanwhile, financial creditors of bankrupt Reliance Communications Ltd (RCom) on Wednesday told the Supreme Court that they will have no option but to liquidate the company if sale of spectrum is not allowed under the Insolvency and Bankruptcy Code (IBC) proceedings.