05 Aug The low-profile Delhi firm behind the Rs 16,000-crore bid for Anil Ambani’s telecom assets
The checkered history of Anil Ambani’s telecom business will see one of its final phases unfold on Wednesday, with NCLT hearing the resolution plan of Reliance Communications and its units. It will decide if UV Asset Resolution (UVARCL) and Jio — two firms that have been widely approved by RCom’s lenders — are the buyers of RCom’s assets.
Amid rising speculations around RCom’s final fate, UVARCL — a little-known Delhi firm that has emerged as a major player in the bidding war for distressed telecom assets in India — has generated a lot of interest in industry and media circles.
UVARCL made a bid of Rs 16,000 crore to buy two companies — RCom and its subsidiary Reliance Telecom — which have spectrum and data centers, according to a plan approved by lenders. On the other hand, Reliance Infratel, which has towers and fibre, is to go to Jio for a total consideration of between Rs 20,000 crore and Rs 23,000 crore.
UVARCL is a low-profile asset reconstruction company (ARC) from Delhi that specializes in buying up bankrupt telcos. Earlier this year, UVARCL got NCLT’s nod to take over Aircel’s assets in the first step towards its resolution plan.
Set up in 2007, UVARCL claims to be among India’s top 10 ARCs in terms of book building. “Restoring NPAs back to health” is what it does, the ARC says on its website.
As for its bid for Anil Ambani’s telecom assets, UVARC feels that although RCom has lost most of its customers, a substantial amount can be recovered by selling spectrum in 14 of India’s 22 telecom circles.
Earlier this year, UVARCL chose to not rule out the option of running a new telecom company in India with Aircel in hand, and possibly RCom joining the ranks. But according to a source, UVARCL may choose to sell RCom’s spectrum assets at a later stage, with Jio possibly being one of the buyers.
Mukesh Ambani’s Reliance Jio has been looking to purchase RCom’s assets for the last couple of years, with each attempt running into legal hurdles. RCom was forced to shut its wireless operations in 2017 amid intense competition in telecom after Jio’s entry in 2016. Once Anil Ambani Group’s flagship company, RCom opted for insolvency proceedings in 2019.
At the time of filing for bankruptcy, RCom had debt of Rs 46,000 crore, with 53 financial creditors — including local and foreign banks, non-banking financial companies and funds — laying claims.
Besides banks, operational creditors such as tower companies, equipment vendors and DoT have claimed nearly Rs 30,000 crore in dues, of which over Rs 21,000 crore has been verified.