Jio likely to bag RCom’s tower, fibre assets for ₹3,600 crore


Bharti’s ₹9,500 cr. bid seeking deferred payment for spectrum dues may be rejected

Reliance Jio is likely to bag the tower and fibre assets of Reliance Communications (RCom) for ₹3,600 crore, while Bharti Airtel’s conditional bid of ₹9,500 crore is likely to be rejected by the Committee of Creditors (CoC), given that most of the money will go to the government and there would be little left for the lenders.

A banker in the know of the development told The Hindu, “Bharti Airtel’s conditional bid of ₹9,500 crore seeks deferred payment for the spectrum liability to the government. There is not much for the lenders.”

New Delhi-based UV Asset Reconstruction Co. and U.S.-based private equity fund Varde Partners have also submitted their bids, but the financial value and the nature of the bids could not be independently verified by The Hindu. “The Committee of Creditors (CoC) would like to sell all assets in a single transaction, but they may have to sell the spectrum, tower and fibre assets separately due to the nature of the bids received. The stated objective of the IBC is value maximisation,” said another person close to the development.

In this case, the tower and fibre assets may go to Reliance Jio, while spectrum and real estate assets may go to Bharti Airtel.

In December 2017, Reliance Jio had entered into an agreement with Reliance Communications to buy its spectrum, telecom, fibre and allied infrastructure for ₹25,000 crore.

The deal did not get approval from the Department of Telecommunications (DoT) as Reliance Jio did not want to take over the past liabilities of RCom.

Lower value

“Now, even the combined bid of Reliance Jio and Bharti Airtel put together is less than what Jio wanted to pay two years ago for RCom’s assets,” said Paras Bothra, president — equities at Ashika Stock Broking.

RCom has 43,000 telecom towers and 178,000 route kilometres of optic fibre network.

RCom owes over ₹49,000 crore to financial creditors and over ₹28,800 crore to the government for past spectrum fees, and the lenders have to take a massive haircut of 80%, even if they go by Bharti Airtel’s offer of ₹9,500 crore.

RCom’s shares rose 3.85% to close at 81 paise on the BSE, in a firm Mumbai market on Friday, valuing the company at ₹224 crore.

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Printable version | Dec 14, 2019 9:49:16 PM |

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