RBI's revised ARC norms: Aircel, RCom debt resolution faces uncertainty

Reliance Communications, then owned by Anil Ambani, had to shut down its business operations as a result of its high debt burden and a failed merger with Aircel

In a big setback to the lenders, two big ticket debt resolutions of bankrupt wireless telephony providers, Aircel and Reliance Communications (RCom), face uncertainty as the Reserve Bank of India (RBI) has made acquisitions under the Insolvency and Bankruptcy Code (IBC) with prospective effect for asset reconstruction companies (ARCs).  

UV Asset Reconstruction Company (UV ARC) had made the winning bid for both the companies but the acquisition was stuck in litigation over transfer of spectrum to the acquirer and the RBI’s earlier ban on the ARCs from investing in bankrupt companies under the IBC. Though the RBI has now allowed