Reliance Communications and Aircel creditors may challenge NCLT order

MUMBAI: Three creditors of Reliance Communications and Aircel could challenge the dismissal of their right to call for a lenders’ meeting by the National Company Law Tribunal (NCLT) in the National Company Law Appellate Tribunal (NCLAT), people familiar with the matter said.

The key operational creditors — those who have dues because they provide a service, not because they lent money — are Ericsson, GTL Infrastructure, and Bharti Infratel.

The NCLT last Monday admitted the RCom-Aircel merger proposal, dismissing the operational creditors’ contention that a lenders’ meeting be called to clarify how the outstandings will be settled before the merger petition is heard by the tribunal.

The NCLT order suggested that any creditor accounting for less than 5 per cent of the companies’ total debt cannot oppose the merger even in the final hearing.

“The order is clear that any of our objections can be made at anytime during the process. But it also dismisses all claimants, saying none of us account for 5 per cent of debt exposure,” said a lawyer involved on behalf of the creditors of Reliance and Aircel.

Telecom tower company GTL Infra had earlier argued that it alone accounted for over 5 per cent of the exposure between current receivables and future commitments.

The argument has been dismissed by the NCLT and the company is likely to challenge it, said a person close to developments. Two lawyers said all three were readying applications to challenge the order in the Appellate court . Sources close to Bharti Infratel said they were “keeping options open” while another source close to Ericsson said it was reviewing the order.

The NCLT order said since none of these companies were owed more than 5 per cent of total outstandings of the companies in the last disclosed balance sheet, they would not be considered eligible to call for a lenders’ meeting. But “the order doesn’t say these companies can’t challenge again,” said another senior lawyer, not involved in the case.

The order also says that since the net worth of the Reliance Communications and Aircel combine is positive, their debt holders remain unaffected by a company rejig. “That isn’t true, we don’t know who will underwrite our liability,” said one of the companies objecting to the merger.

Late last week, RCom filed a caveat in the NCLAT that it should be heard if any one appeals against the NCLT order or asks for an ex-parte order. Ericsson, GTL Infra and Bharti Infratel didn’t respond to emailed queries.

The three companies, besides lenders such as China Development Bank (CDB), Standard Chartered Bank and HSBC had previously objected to the merger plea being admitted by the NCLT. The three lenders withdrew their objections, but retained their right to object at a later stage.