RCom, lenders say Anil Ambani, directors can’t step down

Anil Ambani

Reliance Communications said on Sunday lenders have rejected the resignations of chairman Anil Ambani and four other directors and asked them to cooperate in the ongoing corporate insolvency resolution process. Ambani, together with four directors — Ryna Karani, Chhaya Virani, Manjari Kacker and Suresh Rangachar —resigned from the company earlier this month.

RCom said, in an exchange filing, its committee of creditors (CoC) had met on November 20 and expressed a unanimous view that the resignations cannot be accepted.

The CoC has asked the resolution professional (RP) to convey to RCom’s directors they should continue with their duties and responsibilities as directors and cooperate in the insolvency resolution process at least till its completion.

Since June 28, 2019, RCom’s affairs, business and assets are being managed by, and the powers of the board of directors are vested in, the RP Anish Niranjan Nanavaty, appointed by National Company Law Tribunal (NCLT), Mumbai.

The insolvency proceedings follow an application filed by Swedish telecom gear maker Ericsson. The NCLT has directed the RP to conclude the sale of RCom’s assets by January 10, 2020. The last date for submitting bids is November, 25; the earlier deadline of November 12 was extended at the request of RelianceJio.

The stressed telco’s total debt to financial creditors stands at Rs 51,141 crore with the secured debt estimated at Rs 33,000 crore. Lenders had submitted claims of around Rs 49,000 crore in August.

RCom’s total liability includes Rs 23,327 crore worth of licence fees and Rs 4,987 crore on account of spectrum usage charges. RCom posted a consolidated loss of Rs 30,147 crore for the September 2019 quarter, providing, like peers Bharti Airtel and Vodafone, for liabilities on statutory dues to the tune of Rs 28,314 crore.

The SC on October 24 ruled on annual adjusted gross revenue of telecom companies, upholding the government’s method of calculation. Due to the provisions for the liabilities, Vodafone Idea posted a loss of Rs 50,922 crore in Q2FY20, the biggest quarterly loss in India’s corporate history, while Bharti Airtel reported a consolidated net loss of Rs 23,045 crore.

RCom has put all its assets for sale, including spectrum holding of 122 MHz estimated to be around Rs 14,000 crore, towers business for Rs 7,000 crore, optical fibre network Rs 3,000 crore and data centres worth Rs 4,000 crore.