SBI Board Said To Approve RCom Insolvency Resolution Plan
estrians walk past a Reliance Communications Ltd. Mobile Store in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

SBI Board Said To Approve RCom Insolvency Resolution Plan

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The board of State Bank of India is said to have approved resolution plan for Reliance Communications Ltd., through which lenders are expected to recover around Rs 23,000 crore.

UV Asset Reconstruction Company is believed to have placed bid of around Rs 14,700 crore, while Reliance Jio has made an offer of Rs 4,700 crore for tower and fibre assets of Reliance Infratel Ltd. There will also be a clawback of Rs 4,300 crore of priority payments made to Chinese and Indian creditors.

Jio placed bid for tower and fibre assets of Reliance Infratel Ltd. and UVARC for assets of RCom and Reliance Telecom Ltd. "SBI board has approved a resolution plan for RCom. It is expected to vote favourably for the RCom resolution plan at the committee of creditors Meeting. Voting on the RCom Resolution Plan has started at the committee of creditors and will end on March 4," according to sources privy to the development.

An email query sent to SBI and RCom resolution professional did not elicit any immediate reply. RCom's secured debt is estimated to be around Rs 33,000 crore. Lenders submitted claims of around Rs 49,000 crore in August. Reliance Communications has put all of its assets on sale that includes spectrum holding of 122 megahertz, tower business, optical fibre network, and data centres.

According to an order by the National Company Law Tribunal, the CoC had to complete the entire process by Jan. 10 but it sought extension in the deadline. The resolution professional, Deloitte, is expected to file a resolution plan with the National Company Law Tribunal, Mumbai on March 5.

Also read: RCom Subsidiary Files Bankruptcy Protection Without Prior Consent

RCom in the past had tried to sell assets to various companies, including Reliance Jio, to clear debt but the deals did not materialise. Reliance Jio cancelled agreement to buy RCom assets, including spectrum, as it did not want to bear the past liabilities of the debt-ridden firm. Later, the insolvency proceedings against RCom started on a plea filed by Swedish telecom gear maker Ericsson after the company failed to clear its dues.

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