RCom drafts new debt resolution plan

04 Feb 2019
00:00
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Daily News

India's Reliance Communications has drawn up a new debt resolution plan to help it emerge from bankruptcy and settle its obligations to creditors.

The operator plans to present its debt resolution plan to the National Company Law Tribunal (NCLT) shortly. According to reports, the company will formally propose a plan it has been pursuing outside of the courts, but had been having difficulty securing the required approvals from 100% of lenders or creditors.

It will also be similar to the previous debt resolution plan, which involves measures including the sale of mobile spectrum and infrastructure to Reliance Jio Infocomm, as well as the monetization of the operator's real estate holdings and its subsea cable company Global Cloud Xchange (GDX).

But the previous plan has been repeatedly stalled due to legal challenges and regulatory hurdles, and has been modified in an attempt to address some of these issues.

The NCLT's 66% majority rule will allow RCom to proceed with its plan with the approval of two thirds of creditors, and may also help the operator address its regulatory issues.

RCom has an estimated net debt of around 380 billion rupees excluding interest, the reports state. Its creditors include both domestic and overseas lenders, including Ericsson, which is suing RCom over unpaid dues.

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