Bharti Airtel Offers Highest Upfront Cash For Rcom Assets But With Riders

Bharti Airtel Limited has offered the highest upfront cash for the assets of Anil Ambani-founded Reliance Communications (RCom), which is currently under insolvency proceedings. The Sunil Mittal-led company has offered roughly Rs. 9500 crore – the highest upfront cash settlement – to take over RCom’s assets that include spectrum, towers, fibre, data centres and real estate, according to a person aware of the matter.

Upfront cash is often a key factor which creditors evaluate while deciding a winning bidder.

“The conditions put forth could reduce the viability of Airtel’s bid,” said the person cited above without giving further details. Mint could not immediately ascertain the nature of the conditions.

A Bharti spokesperson had earlier told the Economic Times that a conditional bid was submitted primarily for the spectrum which is a precious asset. “The bid conditions include that the overall consideration will primarily be by way of the deferred spectrum payables to the government being passed on to us on terms and schedules applicable to such deferred payments,” the spokesperson had told the newspaper on 14 November.

Reliance Jio which had last year agreed to buy the assets of Reliance Communications that included its spectrum did not put a bid for the spectrum and real estate assets this time. “Reliance Jio Infocomm has offered Rs. 3600 crore as upfront cash payment but has not placed a bid on RCom’s spectrum assets or the company’s real estate,” said the person cited above.

Apart from the spectrum, Reliance Jio had last year agreed to buy 43,000 telecom towers and 178,000 route km of optic fibre. The deal failed to secure the requisite clearance from the Department of Telecom (DoT).

According to information available on the RCom’s website, the company owed financial creditors over Rs. 49,000 crore at the time of being taken to bankruptcy court in May last year. RCom’s assets are housed under three companies – RCom, Reliance Telecom and Reliance Infratel.

Reliance Telecom and Reliance Infratel owe financial creditors Rs. 24,306.27 crore and Rs. 12,687.65 crore respectively. Reliance Communications thus owes debtors Rs. 86,187.58 crore at a consolidated level. This is besides ₹28,837 crore it owes to the DoT in spectrum dues and other charges as well as the amounts it has to pay its operational creditors, Mint reported on Tuesday.

According to the person cited above, UV Asset Reconstruction Company has offered a bid of Rs. 12,760 crore which will be staggered over several years. However, this bid has a net present value of roughly Rs. 9000 crore.

The bid value of private equity fund Varde Partners, the fourth bidder, could not be immediately ascertained.

Emails seeking responses to Bharti Airtel, Reliance Jio, UV Asset Reconstruction Company, Rcom and insolvency resolution professional Anish Niranjan Nanavaty who is managing the sale process remained unanswered.

The last day for submission of bids was 25 November, a 10-day extension of the earlier deadline.

China Development Bank, Life Insurance Corp. of India, State Bank of India, Exim Bank of China and Bank of Baroda are among the 41 creditors to the beleaguered Anil Ambani group company.―Livemint