The committee of creditors (CoC) of three Anil Ambani-run companies will be meeting soon to discuss Bharti Airtel’s offer to pay Rs 3,000 crore for these entities and the other offers.
The three firms — Reliance Communications (RCom), Reliance Telecom, and Reliance Infratel — are undergoing the insolvency process. While Reliance Telecom has spectrum and some other businesses, Reliance Infratel owns tower and fibre assets.
Airtel’s offer does not include the deferred spectrum payment liability. This has to be paid to the government over several years.
Sources said Airtel has offered about Rs 1,050 crore for RCom and Reliance Telecom. The companies have about 122 Mhz of spectrum in various bands.
It also has 58 Mhz of spectrum in the valuable 800 Mhz band, which powers 4G. This is being used by Reliance Jio in 21 circles under a spectrum-sharing agreement.
Airtel has also offered Rs 1,900 crore for Reliance Infratel.
A part of this will be used for payment of operational creditors, working capital, and the costs of the corporate insolvency resolution process. About Rs 1,750 crore is expected to go the creditors, said sources.
An email sent to Bharti Airtel remained unanswered till the time of going to press.
Sources said Reliance Jio has offered Rs 3,600 crore within 60 days to buy Reliance Infratel.
Varde Partners and UVARCL have also submitted bids for all three companies, but they have no upfront commitment. They have offered to monetise the assets, including spectrum, and distribute proceeds to lenders.
In a meeting of the committee of secretaries on November 29, SBI Caps asked for time to study the bid, many of which are based on the condition of including a staggered payment option rather than an upfront offer. The RP is looking for a buyer of the three companies in order to recover Rs 32,000 crore, which is due to lenders in one company. Sources say, based on the offers the banks seem to have to take a substantial hair cut.
For Reliance Jio, which has bid only for Reliance Infratel, the offer fits in well with its business plans. Last year, Jio had signed an agreement to buy 43,000 of Reliance Infra’s tower assets. It was the only tenant after RCom stopped mobile services.
It also was using the 178,000 km of fibre in order to roll-out the fibre-to-the-home services, as well as backend connectivity to its towers, unlike competitors who use a microwave link.