RCom lenders to oppose China Development Bank's insolvency petition

Published On: 30, Nov 2017 | Source: business-standard.com

Majority of lenders to debt-ridden (RCom) have decided to oppose China Development Bank’s (CDB’s) submitted to the (NCLT).

said, “At a committee of creditors meeting on 29 November 2017, a majority of RCom’s lenders, foreign and Indian, aggregating 31, decided to oppose CDB’s against before the NCLT, Mumbai.”

The lenders also decided to appoint J as their legal counsel to oppose the said petition at the admission stage itself, said owes about 38 per cent of its total secured debt to the had filed a petition with the on November 24. 

had earlier filed a petition opposing RCom-Aircel merger in May this year. The withdrew its petition later.

Telecom equipment manufacturer Ericsson has also filed a petition at the to recover dues of Rs 1,150 crore from A month back, the Anil Ambani-led firm announced extensive debt restructuring plans to lenders. 

Repayment would be by raising Rs 17,000 crore through asset monetisation of spectrum, towers, fibre network, and media convergence nodes.

Another Rs 10,000 crore would be raised and repaid through sale of real estate assets across eight metro cities while lenders were offered to convert Rs 7,100 crore worth of debt into equity.

The company has been forced to reassess its Rs 45,000-crore debt mitigation plans after merger plans with another loss-making telco, Aircel, fell apart.

Reliance Jio led by elder brother Mukesh Ambani and Bharti Airtel are expected to be the frontrunners for RCom’s assets which include 122.4 GHz spectrum across different bands. The company has also been forced to announce closure of its 2G business to focus on their 4G and B2B portfolios.

RCom’s shares closed at Rs 12.60 almost 70 per cent below the year high of Rs 40.15 in April this year.

In June, RCom’s lenders had finalised a strategic debt restructuring (SDR) package with standstill clause till December 2018, which treats loans to debt-ridden company as standard asset. Bank can convert part of the debt into equity according to the SDR plan. 

In terms of the SDR scheme the ‘Reference Date’ fixed by JLF is June 2, 2017. The price of equity shares to be issued to lenders upon conversion of loans thus works out to be Rs 24.71. The said price has been certified by two independent qualified valuers. The said price shall be subject to any change as may be required in compliance with the SDR scheme and/or other provisions of law.