RCom lenders reject resignation of Ambani, others

RELIANCE Communications on Sunday (24) said its lenders have rejected the resignation of chairman Anil Ambani and four other directors, and asked them to cooperate in the ongoing corporate insolvency resolution process.

Ambani along with four directors Ryna Karani, Chhaya Virani, Manjari Kacker, and Suresh Rangachar had resigned from the company earlier this month.

In a Bombay Stock Exchange (BSE) filing, RCom said its Committee of Creditors (CoC) had met on November 20.

"...(the committee had) expressed a unanimous view that the resignations cannot be accepted," it noted.

The filing further said: "...it is being duly communicated to the aforesaid directors of RCom that their resignations have not been accepted and they are advised to continue to perform their duties and responsibilities as the directors of RCOM and provide all cooperation to Resolution Professional in the corporate insolvency resolution process."

RCom had posted a consolidated loss of Rs 301.42 billion (£3.27bn)for the September 2019 quarter due to provisioning for liabilities after the Supreme Court's ruling on statutory dues.

This had marked the second-highest loss posted by any Indian corporate till date, after Vodafone Idea Ltd's Rs 509.21bn losses.

During July-September 2019, RCom set aside Rs 283.14bn on account of provisioning following the Supreme Court order on a calculation of annual adjusted gross revenue (AGR) of telecom companies.

The apex court, last month, upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual AGR, a share of which has to be paid as licence and spectrum fee to the exchequer.

RCom's total liability includes Rs 233.27bn licence fee and Rs 49.87bn spectrum usage charges.

The company is going through insolvency proceedings following an application filed by Swedish telecom gear maker Ericsson. The National Company Law Tribunal (NCLT) has handed over control of the company to an insolvency resolution professional.

Sources estimate that RCom Group's total secured debt is around Rs 330.00bn. Lenders had submitted claims of around Rs 490.00bn in August.

RCom has put all its assets for sale, including spectrum holding of 122 MHz that the company before insolvency proceedings estimated to be around Rs 140.00bn, towers business for Rs 70.00bn, optical fibre network Rs 30.00bn and data centres worth Rs 40.00bn.

RCom is under insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. With effect from June 28, 2019, its affairs, business and assets are being managed by, and the powers of the board of directors are vested in, the Resolution Professional Anish Niranjan Nanavaty, appointed by NCLT, Mumbai.

Ambani got charge of RCom after property division between him and his elder brother Mukesh Ambani in 2005.

Ambani was once in the world's top 10 richest persons' list but now RCom is struggling to even sell assets for recovery of dues.

(PTI)