Reliance Jio Infocomm, Bharti Airtel, UV Asset Reconstruction Company and private equity firm Varde Partners have bid for the assets of bankrupt Reliance CommunicationsNSE 6.25 % and its two units, people familiar with the matter said.
However, the sale of spectrum, the most critical and valuable asset, was still under a cloud, with telecom department officials saying the airwaves can’t be sold without government approval and bankers insisting the asset was pledged to them and they can sell it. The four companies put in 11 offers for the three entities – RCom, Reliance Telecom and Reliance Infratel – which means one of them hasn’t bid for all the assets. RCom’s assets, besides spectrum, include data centres, optic fibre networks and towers. Varde Partners is said to have not bid for all the assets, although it could not be independently confirmed.
Varde Partners and UVARCL declined to comment. Airtel, Jio and RCom did not respond to ET’s queries.
“We are bound by confidentiality obligations and are unable to comment on client-specific matters,” said Deloitte, which is overseeing RCom as its resolution professional.
UVARCL is shortlisted to pick up the assets of another bankrupt telco, Aircel, pending the National Company Law Tribunal’s approval of its resolution plan. Deloitte is the resolution professional in the Aircel case as well.
DoT, which previously argued in the NCLT that spectrum can’t be sold without its approval, is part of RCom’s Committee of Creditors that opened the bids on Monday.
“Neither the telecom department nor the courts have granted any permission to sell RCom’s spectrum,” a senior government official told ET.
However, the lenders said RCom had pledged the spectrum while raising loans from the banks to bid for the airwaves.
“The company’s spectrum is the first security for banks. The company was given loans to buy spectrum with this security in place. In other words, this spectrum is still in the hands of the banks and is included in the assets of the company,” said a banker familiar with the bids.
Financial creditors, including local and foreign banks, nonbanking finance companies and funds, have claimed 57,382 crore as dues from the company, out of which 49,224 crore has been accepted by the resolution professional. The resolution professional needs to complete the sale by January 10.
“We have got four bids for this asset, which is a good start. But this resolution looks to be a complicated process as there are a lot of technicalities involved. Only after we go through the bids closely will we know who is offering how much upfront and what is the timeline for repayment by these bidders. This is just the start,” said another banker involved in the process.
Some bankers are said to be expecting to raise 10,000 crore to 16,000 crore from the sale of the company’s assets, excluding spectrum.
Another person who was at the bidding arena on Monday said prospective buyers will review the condition of spectrum and fibre whose value erodes with time.