Telecom operator Bharti Airtel has withdrawn its bid to purchase assets of Reliance Communications (RCom) after terming the move of the committee of creditors to extend the bid submission deadline on the request of Reliance Jio as “extremely unfair” and “biased”.
Without naming Reliance Jio, Bharti Airtel director (finance) Harjeet Kohli, in a letter to resolution professional Anish Niranjan Nanavaty, said his company’s request to extend the deadline was turned down by the committee of creditors (CoC) of RCom, but, surprisingly, the dates have been extended to accommodate submission by a bidder.
“Given the complexities involved in the proposed transaction, vide our letter dated October 31, 2019, we requested for an extension of time to submit the resolution plan from November 11, 2019, till December 1, 2019. Disappointingly, our request for extension was rejected by CoC,” Mr. Kohli said.
Bharti Airtel, Bharti Infratel and private equity firm Varde Partners have already submitted their bids for assets of Reliance Communications, while Reliance Jio has sought extension of the asset sale deal deadline by another 10 days. Airtel has placed a conditional bid to buy RCom spectrum, while Bharti Infratel has submitted bids for mobile towers.
The CoC extended the deadline by 10 days and has now decided to open bids on November 25.
“To our utter shock, we have learnt that the CoC has now decided to extend the submission timeline to November 25, 2019, until 1200 hours, solely based on the request of another potential bidder,” Mr. Kohli said.
He said since Bharti Airtel’s request was formally declined by the CoC, the company was constrained to submit the bids under due haste without the benefit of sufficient time to complete the resolution plan within the set deadline.
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“We find this conduct, inequitable, questionable and against the spirit of what should be a highly transparent process. To say the least, it is extremely unfair and rather biased...we hereby formally withdraw our resolution plans while reserving all rights, including the right to submit our resolution plan afresh within the new deadline communicated now,” Mr. Kohli said.
RCom tried to sell assets to various companies, including Reliance Jio, to clear debt, but the deals did not crystallise. Reliance Jio cancelled the agreement to buy RCom assets, including spectrum, as it did not want to bear the past liabilities of the debt-ridden firm.
Insolvency proceedings against RCom was started on a plea filed by Swedish telecom gear maker Ericsson, after the company failed to clear its dues.
RCom chairman Anil Ambani tendered his resignation after the company posted a consolidated loss of ₹30,142 crore for July-September 2019, due to provisioning for liabilities after the Supreme Court ruling on statutory dues.
This was the second-highest loss posted by any Indian corporate till date.
The National Company Law Tribunal has handed over the control of the company to an insolvency resolution professional.
Sources estimate that RCom Group’s total secured debt is around ₹33,000 crore. Lenders have submitted claims of around ₹49,000 crore in August.
