Reliance Communications to approach NCLT for debt resolution

The management of Reliance Communications Limited (RCOM) has decided to approach the National Company Law Tribunal (NCLT) with a debt resolution plan which includes among other things the sale of all telecom infrastructure assets and spectrum, said a company spokesperson on Sunday.

"RCOM's management will propose a similar debt resolution plan in the National Company Law Tribunal (NCLT) process, as was earlier being pursued outside NCLT," he said in a statement adding that the "key elements of the debt resolution plan remain unchanged including the sale of all telecom infrastructure assets and spectrum."

According to the spokesman, the other key elements of debt resolution include "strategic monetisation of GCX (Global Cloud Xchange, a subsidiary of Reliance Communications), India Data Center (IDC), Indian Enterprise Business; and development of 30 million sq ft at the Dhirubhai Ambani Knowledge City complex, and sale of other real estate assets."

"The Board also expects strong support from and requisite approvals of the creditors' committee, resolution professionals and NCLT in the interest of all stakeholders. The RCOM Board, therefore, sees a fast-track NCLT resolution in 2019, free of all uncertainties and challenges," said the spokesperson.

"The Board remains confident on future prospects as a going concern under a new ownership on completion of the NCLT resolution process," he said.

The spokesperson said in the statement that "the company has been faced with various mostly, untenable issues raised by the Department of Telecommunications. These issues inter alia resulted in numerous legal issues at High Courts, TDSAT and the Supreme Court, which frustrated the existing plan and can now be addressed/resolved under the NCLT process."

"Further, challenges raised by unreasonable minority lenders can be now be overcome through the NCLT's 66 per cent majority rule, against the 100 per cent approvals rule outside NCLT. Also, the RCOM Board expects substantial unsustainable debt and liabilities to stand extinguished under the NCLT process," he said.

"The RCOM Board will actively participate (without voting rights) in the NCLT resolution process, as clarified by a recent judgment of the Supreme Court," said the spokesperson.