Bharti Airtel is interested in buying select spectrum and some equipment of Reliance Communications (RCom) under a process being run by its lenders to sell assets of the Anil Ambani-owned telco piece by piece and recover some portions of the roughly Rs 45,000 crore that it owes them.
“We have expressed our interest only in buying select spectrum and some equipment,” a spokesperson for Bharti Airtel, India’s top telco, said in an email to ET, when asked about its interest in RCom’s assets being put on the block by the debt-ridden telco’s lenders. The sale process could thus see Airtel vying with Reliance Jio for the spectrum in the 850 MHz band — considered highly efficient for 4G services — with the proceeds going to the lenders. The sale of RCom’s assets, including spectrum, network equipment and fibre, has evoked interest of many of the companies in the sector, including from tower providers like Indus, Bharti Infratel and Canada’s Brookfield for towers.
An industry insider said that it was unlikely that the suitors would bid aggressively for the airwaves as there is no longer any spectrum shortage in the country.
Reliance Jio, Bharti Infratel, Indus Towers and Brookfield did not respond to queries as of press time RCom’s stock fell 2.9% to end the day at Rs 13.60 on the BSE on Thursday, pegging its market cap at Rs 3,385.01crore.
According to two people aware of the developments, lenders comprising several local and international banks have appointed SBI Cap — the investment banking arm of RCom’s top lender State Bank of India (SBI) — to seek interests for the telco’s assets. They add that request for proposals (RFPs) for assets including spectrum, network equipment and fibre assets have already been issued.
“Expression of interest (EoIs) have come from practically everyone. Now, they have three weeks to submit non-binding offers — by December 12-13 — and then based on the numbers (bid value), the due diligence will take place,” the person said.
“An asset won’t necessarily be sold to just one company,” the person added, indicating that the sale will be done in a piece meal manner depending on the value it generates. A second source said Credit Suisse was trying to get investors into the rest of RCom — the entity that will comprise its undersea cable business, data centres and the enterprise business — for taking majority stake.
SBI Cap and Credit Suisse declined to comment on queries seeking confirmation. RCom also did not comment as of press time. More than 20 banks have lent to RCom, of which SBI with Rs 2,375 crore has the largest exposure followed by Punjab National Bank (Rs 1,350 crore) and IDBI Bank (Rs 1,230 crore). The telco also has $1 billion in loans from Chinese banks.
Source: Economic Times