Shareholders okay RCom asset monetisation plan for servicing Rs 450-bn debt

Debt-ridden telecom operator RCom said on Friday its shareholders had approved an asset monetisation plan which would be used to repay dues.

“The shareholders of the company approved the monetisation of its assets. The company announced the results of postal ballot on February 15, 2018, whereby the shareholders approved the resolution to monetise spectrum, towers, fibre, telecom infrastructure and other assets with overwhelming majority of 99.91 per cent,” RCom said in a statement.

The company which is reeling under debt of around Rs 450 billion said that post monetisation, the debt and liabilities of RCom will reduce by about Rs 250 billion by prepayment of debts and transfer of Department of Telecommunications' Spectrum Installments.

The loss-making firm has stopped voice call services and is continuing operations of its business-to-business division. “These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst relatively low competitive intensity,” RCom said.

Manipal Technologies has withdrawn a bankruptcy petition against telecom operator Reliance Communications before National Company Law Appellate Tribunal (NCLAT) claiming dues.

Counsel appearing for Manipal Tech informed NCLAT bench this week that they have instructions to withdraw the appeal.

This was not even opposed by the counsel appearing for RCom.

“The appeal is disposed of as withdrawn," noted a two-member bench of NCLAT Justices A I S Cheema and Balvinder Singh, in its order.

On November 15, NCLAT had issued notice to RCom over the petition filed by the Karnataka-based company, which had claimed dues of Rs 20 million for the biometrics finger print scanners supplied to Rcom in 2016.

The company had alleged that the money was not paid as RCom claimed that the invoices were raised in the name of HP Financial Services and not RCom.

Earlier, Manipal Tech had approached National Company Law Tribunal, Mumbai, which on September 25, 2017 rejected Manipal's plea accepting RCom's argument, saying that RCom has no obligation to pay the amount.

Following this, Manipal Tech moved NCLAT.

Manipal Tech had approached NCLT Mumbai under section 9 of the Insolvency and Bankruptcy Code 2016 to recover Rs 20 million.

According to the facts as mentioned in the NCLT order, the company had supplied scanners and the bills were raised against Hewlett Packard (HP) Financial Service.

As the goods have been supplied to RCom and there being an undertaking for the payment of the same by RCom, it had moved against RCom instead of HP Financial Services against whom the bills were raised.

NCLT had rejected the plea saying “it does not appear that RCom is under obligation to make payments towards the bills raised against Hewlett Packard Financial Services India Pvt. Ltd” and asked it to approach a civil court for the same.