No respite in sight for RCom as government unwilling to renew license until debt-laden phone company clears dues
New Delhi: Reliance Communications’ (RCom’s), promoted by Anil Ambani, who is now bankrupt, plans to renew its telecommunications license is about to face a hurdle as the Department of Telecommunications (DoT) is not ready to give the green light unless the ailing company clears its statutory contributions of Rs 26,000 crore. If the indebted company fails to do so, it will be forced to give up the specter and its plan to sell assets as part of the insolvency process will take a major shock.
“The DoT has informed RCom that it cannot renew telecommunications licenses unless the old spectrum fees are paid. This follows the communication from the resolution professional (RP) to the ministry according to which, in accordance with the insolvency and bankruptcy code, his contributions are subject to a moratorium and he does not have to pay them ”, a declared a manager with direct knowledge of the file. HEY.
The bankrupt telecommunications company had written to the telecommunications department, requesting that its license be renewed for another 20 years. RCom holds a pan-Indian telecommunications license and owns airwaves in the 850 MHz band in 14 of India’s 22 telecommunications circles. His licenses expire in July.
Currently, the besieged telephone company is run by its RP, accounting firm Deloitte, in an insolvency process under the Insolvency and Bankruptcy Code (IBC) after accumulating a debt of 46,000 crore rupees.
The financial daily quoted an anonymous telecom industry official familiar with the case as saying the RP could go to the Telecommunications Settlement and Appeals Tribunal (TDSAT) against the DoT’s decision.
Under the weight of a massive debt of around Rs 46,000 crore, RCom had decided to shut down its services at the end of 2017. The company did not pay any of its required Rs 26,000 crore in adjusted gross income (AGR). by the government, citing its ongoing bankruptcy. procedure.
In accordance with IBC procedures, RCom’s lenders committee last year approved a motion for a resolution that would see asset rebuilding firm UV Asset Resolution Co (UVARCL) acquire the company’s spectrum for Rs 12 760 crore, over 12 years, with Rs 5 crore initial cash payment. This is a massive part of the Rs 20,000 to 23,000 crore expected from the sale of the assets of RCom and its two units, Reliance Telecom and Reliance Infratel. In addition, the sale of RCom’s assets includes towers, fiber, enterprises, data centers and land.