RCom, RTL lenders to move Supreme Court over spectrum sale

While the Supreme Court had asked the NCLT to decide whether spectrum could be sold under insolvency resolution, lenders want the apex court to direct the National Company Law Appellate Tribunal (NCLAT) to look into it, according to two people aware of the matter.

“This is because the Mumbai NCLT has already approved Aircel’s resolution plan which envisaged sale of spectrum and therefore it would not be fair to seek directions from the same tribunal," said the first person cited above.

The Supreme Court had on 1 September said that the NCLT should decide whether spectrum held by stressed telcos can be sold under IBC.

“Therefore, lenders have to first go to the Supreme Court to seek a revision that allows the appellate tribunal to decide on the issue," said the second person.

On 21 August, the department of telecommunications (DoT) had told the NCLT that spectrum assets should not be included in the resolution plan for RCom and its unit, RTL. RCom owes ₹49,054 crore to its lenders and ₹25,199 crore in spectrum usage charges and licence fee dues to DoT, as per government estimates.

UV Asset Reconstruction Co. Ltd (UV ARC) and Reliance Jio, the winning bidders for RCom’s spectrum, real estate, enterprise, tower and data centre business, have together offered more than ₹20,000 crore (on net present value basis) for these assets.

However, in another twist, the Reserve Bank of India (RBI) recently rejected UV ARC’s resolution plan for Aircel, saying the plan does not conform to the guidelines of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act. RBI’s primary objection, Mint reported, was that instead of buying debt, an ARC was buying equity in a company.