DoT as operational creditor to get zero proceeds from RCom, RTL resolutions

Department of Telecommunications (DoT) and government object to the resolution plans of RCom and RTL

The Department of Telecommunications (DoT) will get zero proceeds out of the resolution plan for Reliance Communications Limited (RCom) and Reliance Telecom Limited (RTL).

While the lenders will get Rs 23,000 crore, DoT is an operational creditor. As per the Insolvency and Bankruptcy Code (IBC), operational creditor gets zero proceeds as the secured lenders first get the amount against the total dues.

The Department of Telecommunications (DoT) and Government of India have objected to the resolution plans of RCom and RTL.

The National Company Law Tribunal (NCLT), Mumbai is likely to adjourn the resolution plans of Reliance Communications Limited (RCom) and Reliance Telecom Limited (RTL) to later this week perhaps August 21.

The RCom and RTL resolution plans treat DoT as operational creditor. The RCom and RTL Committee of Creditors led by State Bank of India (SBI) allocated nothing to DoT out of total proceeds of Rs 23,000 crore.

The DoT is expected to file written submissions by Friday with the NCLT, Mumbai.