scorecardresearch
NCLAT allows RCom to execute asset sale

NCLAT allows RCom to execute asset sale

New Delhi, Apr 6 (PTI) Debt-laden Reliance Communications today said it has been allowed to proceed with Rs 25,000 crore asset monetisation plan, as the National Company Law Appellate Tribunal (NCLAT) has lifted the stay on sale of its tower and fibre assets.

The company said it is "now very confident" of achieving overall debt reduction of Rs 25,000 crore in the coming weeks from its asset monetisation programme.

"As directed by the Supreme Court, RCOM moved the NCLAT today for vacation of the stay in relation to sale of its tower and fibre assets... By an interim order passed today, the NCLAT has vacated the remaining stay, and allowed execution of sale deeds and deposit of the proceeds with SBI (State Bank of India) in an escrow account," a company spokesperson said in a statement.

The Supreme Court, yesterday, vacated a stay on sale of certain assets by RCom, including spectrum, media convergence nodes (MCNs) and real estate, thereby allowing its lenders to move ahead with the planned sale.

"Taking into consideration the fact that if the impugned order is stayed it will amount to grant of final relief, while we are not inclined to stay of the impugned order for the present, give liberty to State Bank of India/Convenors of Joint Lenders to reach agreement to sale/ sale deed with regard to the mortgaged properties of the Company with any reliable purchaser," said NCLAT bench headed by Chairperson Justice SJ Mukhopadhaya.

It further said that lenders "will keep the amount in a separate Escrow Account, which shall be subject to the decision of the appeal".

The tribunal also said that if SBI "intends to execute sale deed(s), the parties will co-operate with it," and posted the matter on April 18, 2018 for next hearing.

The lifting of the stay by NCLAT today comes as a major relief to the company saddled with huge debt, as it can now proceed with its full asset monetisation blueprint covering spectrum, towers, fibre, MCNs and real estate.

"RCom is now very confident of achieving overall debt reduction of approximately Rs 25,000 crore within the next few weeks...," a RCom spokesperson said.

The spokesperson added that distribution of proceeds of only the tower and fibre will be subject to the final decision of the appellate tribunal on April 18, 2018.

Based on legal advise, RCom believes the claim of the minority investors in the tower and fibre proceeds, which is fully disputed by the company, "can at best be Rs 200-300 crore," the spokesperson said.

In December 2017, Mukesh Ambani-led Reliance Jio had announced a mega deal to acquire mobile business assets including spectrum, mobile towers and optical fibre network of RCom, owned by his younger brother Anil Ambani.

The asset sale process that would have helped RCom pare its debt, however, hit the first hurdle when an arbitral court barred the sale of assets without its permission, on an appeal by telecom gear maker Ericsson India. PTI SR MBI KRH PTI SR MBI KRH BAL BAL