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Reliance Communications puts non-core assets on sale
A two-year wait and still no approval from the bankruptcy court for the resolution plan of Reliance Communications has prompted the resolution professional (RP) to find buyers for non-core assets of the defunct telecom company, said two people aware of the development.
The winning bidder for RCom, UV Asset Reconstruction Company, and lenders have given in-principle consent to the RP to explore the sale of its unencumbered assets, said the people. The RP, Anish Nanavaty backed by Deloitte, will obtain a fresh valuation and hold an auction of the assets, similar to the process followed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, they said.
The RP has invited expressions of interest by April 17 for six assets: land in Pune (871.1 sq metres) and Chennai (3.44 acres); offices on Chennai’s Haddows Road and Bhubaneswar; and shares of Campion Properties Ltd and Reliance Realty.
Since the corporate insolvency and resolution process has crossed the maximum of 330 days that is permitted under the Insolvency and Bankruptcy Code, lenders are apprehensive that the tribunal will not permit them to restart the resolution process. Thus, they are resorting to the piecemeal sale of assets, one of the people said.
In March 2020, lenders had unanimously voted for the UV ARC’s resolution plan for two bankrupt companies: RCom and Reliance Telecom. They also approved unanimously a resolution plan for Reliance Infratel by Reliance Digital Platform & Project Services, a Reliance Industries group company.
Insolvency proceedings against the three Anil Ambani group companies started in May 2018, but the process was halted for a year for lenders to work on an out-of-court settlement, which they eventually could not reach.
Since then, there has been a delay of two years due to matters related to the sale of spectrum and payment of spectrum fee to the government based on adjusted gross revenue; and more recently because of the ineligibility of UV ARC as a resolution applicant.
The Reserve Bank of India had declined to give UV ARC approval to participate as a resolution applicant for Aircel, another bankrupt telecom company. Pehal News
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