Bankrupt telco Reliance Communications<\/a>, which is undergoing insolvency proceedings, has failed to attract any buyers for its non-core assets it put on sale earlier this year. In March, the company through its appointed resolution professional had informed the Bombay Stock Exchange that the committee of creditors had approved the sale of certain non-core assets of RCom<\/a>. Expression of interest was invited by April 17.
These assets included land in Pune (871.1 sq metres) and Chennai (3.44 acres); offices in Chennai's Haddows Road and Bhubaneswar; and shares of Campion Properties Ltd and Reliance Realty.
However, the company failed to attract interest, resulting in the extension of the deadline for submitting interest to bid multiple times, the latest being June 27. Sources in the know reveal that once again, there have been no takers for these properties.
There is no clarity on what the company intends to do next. It was to approach the National Company Law Tribunal (NCLT<\/a>) for approval of sale of said assets on July 20, but with no interested parties, it does not seem likely.
Mails sent to resolution professional Anish Nanavaty on the matter did not elicit any response till press time.
Experts believe that the lack of interest in the assets up for sale could be because of uncertainty related to what these properties and companies may be attached to, and the fact that the sale of the assets is subject to NCLT approval.
Sources also reveal that the company contemplated selling its enterprise business as well. However, the business, which is running with a skeletal team, according to those in the know, depends heavily on bulk voice and messaging services. The enterprise offerings by telcos<\/a> have advanced to include advanced products using data, internet messaging, and ad solutions. Hence analysts believe that this too is unlikely to attract any meaningful buyers.
Reliance Group’s IoT<\/a> (Internet of Things) business - Unlimit, which it set up in late 2016 in partnership with Cisco Jasper<\/a>, shut shop last year. Its chief executive Juergen Hase left the company in January 2021 after his contract tenure expired.
This is the latest impediment faced during the corporate insolvency resolution process that RCom is undergoing. Already the process is stuck due to litigation. Meanwhile, those in the know reveal that the assets to be sold continue to depreciate.
One of the key assets in the process is the spectrum owned by RCom. However, the company is embroiled in a battle regarding this as the Department of Telecommunications has argued that since spectrum is a national resource, it cannot be sold as part of the insolvency proceedings.
Additionally, the company’s telecom licence expired last year, which means it does not have the right to use the spectrum it owns. Once the company loses the right to spectrum, the asset (spectrum) has little to no value, say analysts.
Its other assets—the towers and underground fibre (under Reliance Infratel), which were to be sold to Reliance Projects and Properties Management Services, are also in a limbo since the State Bank of India declared Reliance Infratel’s accounts as fraudulent. This led to Jio filing an application seeking the forensic audit reports on which the accounts were declared fraudulent. SBI has since then removed the fraudulent tag from RITL accounts. The resolution plan in this case amounted to Rs 4,400 crore.
Analysts say the value of the towers will also depreciate over time, especially if not maintained. An executive in the know said some of the towers have fallen into rust and are unviable for use before a thorough repair while some may even have to be re-erected.
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