A creditor panel led by the State Bank of India has okayed the bankruptcy resolution plans of Mukesh Ambani-owned Reliance Digital Platform & Project Services and UV Asset Reconstruction Company for Anil Ambani-owned Reliance Communications and its assets.
Reliance Digital Platform houses all digital businesses of Reliance Industries Ltd including Reliance Jio Infocomm.
Under the resolution plans, the lenders will likely receive 70% or about Rs 23,000 crore of their dues.
This is likely to be the highest-ever recovery of dues by financial creditors in the troubled telecom sector and in the resolution process under the Insolvency and Bankruptcy Code.
In the case of Bhushan Steel and Essar Steel, the recovery was 63% and 60%, respectively, going by data of the Insolvency and Bankruptcy Board of India.
All the creditors on the panel have approved the resolution plan submitted by UV Asset Reconstruction Company for Reliance Communications, the Anil Ambani-owned company informed in a regulatory filing.
As for subsidiaries, the creditor panel has okayed UV Asset Reconstruction Company’s plan for Reliance Telecom and Reliance Digital’s proposal for Reliance Infratel.
Going by the approved resolution plans, Reliance Communications’ lenders will claw back priority payments of Rs 4,300 crore made to Chinese (Rs 1,300 crore) and Indian lenders (Rs 3,000 crore), a senior banker confirmed.
The loans of Chinese lenders will reduce by over 60% (Rs 8,000 crore) from Rs 12,000 crore to Rs 4,000 crore.
The buyers will have access to Reliance Communications’ assets including airwaves in the 850 megahertz or MHz band in 14 of India’s 22 telecom circles. Reliance Infratel has about 43,000 telecom towers as well as some fibre assets and data centres.
In January 2020, UV Asset Reconstruction Company had emerged as the highest bidder for Reliance Communications and Reliance Telecom.
Mukesh Ambani’s Reliance Jio had also made the biggest bid of Rs 4,700 crore for the tower and fibre assets of Reliance Infratel.
UV Asset Reconstruction Company had bid Rs 14,000 crore for spectrum, real estate assets as well as the enterprise and data centre businesses held in Reliance Communications and Reliance Telecom.
Besides, bids also came from Bharti Airtel and alternative investment firm Varde Partners.
Reliance Communications, once a flagship company of the Anil Ambani-led Reliance group, filed for bankruptcy in early 2019.