Connect with us

Headlines of the Day

UVARCL to approach SC to allow sale of Aircel spectrum

UV Asset Reconstruction Company Ltd (UVARCL) will shortly move the Supreme Court against a National Company Law Appellate Tribunal (NCLAT) order that forbids Aircel from selling its spectrum until the bankrupt telecom firm cleared its dues to the government.

UVARCL, which has the clearance of the National Company Law Tribunal (NCLT) to acquire Aircel, will approach SC over the next couple of days to prevent any delay in the asset monetisation of the telecom operator, a person aware of the development said. “The dedicated bankruptcy court (NCLT) has already given its nod and UVARCL has to protect its assets now.”

Aircel’s committee of creditors (CoC), headed by State Bank of India, had earlier moved the top court, fearing that the appellate tribunal’s order would lead to further delays in completing the UVARCL deal, leading to liquidation of Aircel.

Deloitte, which was handling Aircel through the debt resolution process, is also planning to move the SC on the same grounds. Deloitte is also the resolution professional for Reliance Communications, whose spectrum and fibre assets were cleared by lenders to be picked up by UVARCL, though the proposal is yet to be cleared by the NCLT.

In an April order, the appellate tribunal stated that the spectrum “cannot be utilised without payment of requisite dues, which cannot be wiped off by triggering CIRP (corporate insolvency resolution procedure) under the I&B Code (Insolvency and Bankruptcy Code) … Defaulting licensees/telcos cannot be permitted to wriggle out of their liabilities…”

According to lenders, the resolution professional and UVARCL, spectrum is the most valuable asset for a telco and the entire resolution process may go under if it cannot be sold.

UVARCL is supposed to take over Aircel’s assets, including spectrum, for Rs 6,630 crore, with lenders taking a haircut of 89% on total dues of Rs 58,670 crore. UVARCL was expecting to generate the biggest chunk of funds — Rs 800-1,300 crore — through the sale of Aircel’s spectrum in the 1800 MHz and 2100 MHz bands.

According to the Aircel resolution plan approved by the NCLT in June 2020, operational creditors, including the telecom department, were provided Rs 28.50 crore — 0.16% of the Rs 17,462 crore they had claimed.

But, according to the telecom department, bankrupt telcos cannot evade paying statutory dues of about Rs 40,000 crore and sell their most precious asset, spectrum. The money owed by them – Aircel (Rs12,389 crore), RCom (Rs26,000 crore) and Videocon Telecommunications (Rs1,376 crore) – are against dues over adjusted gross revenue. The department has claimed additional dues of Rs 14,000 crore from Aircel, including unpaid instalments for the right to use spectrum. But Aircel’s committee of creditors and UVARCL had questioned if the DoT as an operational creditor could get more dues than what had been sanctioned by the bankruptcy court.

SC’s decision in the case will have a bearing on the insolvency resolution process of RCom as well since the issues are similar. Koliasa

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!