The Department of Telecommunications (DoT) has opposed the resolution plan of Reliance Communications (RCom) and its unit Reliance Telecom in the dedicated bankruptcy court, on grounds that it does not recover its dues from the proceeds of the proposal chalked out by the committee of creditors, including State Bank of India.
DoT’s opposition to the resolution plan will be a big blow to asset reconstruction firm UVARCL which is awaiting National Company Law Tribunal’s (NCLT) nod on RCom’s sale of assets, including spectrum, fibre and data centre. The NCLT on Wednesday directed DoT to file a written submission by Friday.
The telecom department’s grievance has been that it gets nothing from the Rs 23,000 crore proceeds chalked out in the RCom resolution plan. The government has claimed adjusted gross revenue (AGR) dues from RCom of Rs 25,199.27 crore and said the telco’s deferred liability for spectrum purchased between 2014-2016 stood at Rs 1,597.68 crore, until October 30, 2019.
This will be the second time the government is opposing a resolution plan of a bankrupt operator. The DoT has already moved the appellate tribunal against the NCLT’s approval of a resolution plan for another insolvent telco, Aircel.
Key assets, including spectrum, of both the bankrupt telcos – RCom and Aircel – are to be picked up by UVARCL, as per the resolution plans.
The government has fought a long-drawn battle over the ownership of airwaves against Aircel and RCom and has opposed that without paying spectrum related dues, airwaves cannot be transferred to another party. Both telcos say their resolution plans will have to be scrapped if right to use of spectrum isn’t allowed to be transferred, as it was the most crucial asset.
Aircel and RCom went bust under debt of Rs 26,000 crore and Rs 46,000 crore, respectively.
DoT has claimed dues of Rs 14,000 crore from Aircel as an operational creditor, and AGR dues of Rs 12,389 crore, along with unpaid installments for the right to use spectrum.
In an affidavit filed in Supreme Court on the ongoing AGR matter, DoT stated that it has been ‘consistently” been asking RCom to pay its AGR dues along with other spectrum related dues.
This May, it informed the resolution professional Deloitte that if dues regarding deferred spectrum auction installment are not paid then “relevant spectrum/license shall become liable to be terminated”.
Rcom’s another unit – Reliance Infratel, which houses towers – is proposed to be bought by Reliance Jio Infocomm. That too is awaiting final order of NCLT.
