With lenders approving a Rs 23,000 crore (Rs 230 bn) resolution plan for Reliance Communication, as much as Rs 5,500 crore (Rs 55 bn) will flow to Chinese banks, clearing about 55 per cent of their principal dues, including of those lenders to whom firm's promoter Anil Ambani had allegedly given a personal guarantee.
A committee of RCom creditors on March 4 unanimously approved the insolvency resolution plan to settle unpaid debt of Reliance Communications, Reliance Telecom and Reliance Infratel, sources in the panel said. All the 38 lenders voted unanimously.
While Reliance Jio will get the tower and fiber assets of Reliance Infratel Ltd for Rs 4,700 crore, UV Asset Reconstruction Co Ltd (UVARC) will get assets of RCom and Reliance Telecom (spectrum) for Rs 14,000 crore, they said.
After considering a clawback clause, the resolution plan fetched Rs 23,000 crore, which will go towards paying dues of Chinese banks, who are the largest lenders, they said, adding Chinese banks will receive Rs 5,500 crore and their principal debt would stand reduced to Rs 4,500 crore.
Against the alleged personal-guarantee of one debt, the Chinese banks would receive Rs 1,800 crore (USD 250 million) and their exposure will reduce by 55 per cent to USD 300 million (Rs 2,200 crore).
The Chinese banks -- Industrial & Commercial Bank of China Ltd, China Development Bank and the Export-Import Bank of China -- had dragged Ambani to the UK court to recover outstanding.
The sources said the total principal secured debt of banks is around Rs 33,000 crore. Under the plan, 38 lenders of RCom can recover over 70 per cent of their outstanding of Rs 33,000 crore secured debt, they said.
"The committee of creditors (COC) has approved the resolution plans of RCOM and its subsidiaries RTL and RITL with an absolute majority of 100 per cent by the lenders at the COC meeting, as against the mandatory requirement of 66 per cent," a source said.
Lenders submitted claims of around Rs 49,000 crore in August of which Rs 33,000 crore estimated to be secured debt. Reliance Jio and UV Asset Reconstruction Company Limited were the highest bidders for RCOM assets at the CoC meeting held on January 13, 2019.
Jio had placed a bid of around Rs 4,700 crore for the tower and fiber assets of Reliance Infratel Ltd (RITL), while UVARCL has made an offer of Rs 14,000 crore for spectrum, real estate assets, enterprise, and data center businesses held by RCom and Reliance Telecom Ltd.
In addition, the creditors will clawback the priority payments of Rs 4,300 crore made to Chinese (Rs 1,300 crore) and Indian lenders (Rs 3,000 crore).
"Loans of Chinese lenders will reduce by nearly 65 per cent to around Rs 4,000 crore from around Rs 12,000 crore. This is the highest-ever recovery of dues by financial creditors in the telecom sector, which has seen the exit or shut down of 11 out of 12 telcos since 2012," the source claimed.
According to the Insolvency and Bankruptcy Board of India, the recovery to lenders in the case of Bhushan Steel and Essar Steel was 63 per cent and 60 per cent, respectively. "The bidders have committed to pay 30 per cent of the proceeds of around Rs 7,500 crore within 90 days," the source said.
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