Bharti Airtel, one of the biggest telecom operators, has withdrawn his bid to purchase the assets of Reliance Communications. They alleged the act of the Committee of Creditors as biased and Unfair, i.e., their act of extending the time limit of submitting the bid. CoC extended the time limit by ten days for submitting the bid on the request made by Reliance Jio.
Harjeet Kohli, who is the finance director of Bharti Airtel wrote a letter to the resolution professional and without naming Reliance Jio said that the committee of creditors rejected their request to extend the time for submitting the bid for Reliance communication. Still, surprisingly the dates have now been extended to accommodate a bidder.
Kohli added that Bharti Airtel requested on October 21, 2019, to extend the time till November 11, 2019, to submit the resolution plan as there were several complexities involved in RCom transactions. However, to their disappointment, the CoC rejected the request.
Bidders to buy the assets of Reliance Communications are Bharti Infratel, Bharti Airtel and Varde Partners which is a private equity firm who have already submitted their bid. However, reliance Jio later joined and have sought an extension of another 10 days to submit the asset sale deed. Bharti Airtel has given a condition bid to buy RCom spectrum whereas Bharti Infratel submitted the bid to buy RCom mobile towers.
CoC has now extended the date to submit the bid to November 25, 2019. This came as a shock to Bharti Airtel as this extension was made on the request of another potential bidder.
How has this extension affected the bid submitted by Bharti Airtel?
As the request of extension made by Bharti Airtel was rejected, the company did not get enough time to prepare the resolution plan. They submitted it under time constraints and were not able to enjoy the benefit of extended timeline to submit the plan. Hence, they found the conduct of the CoC as questionable and inequitable. This step of extended the time for a particular bidder is the spirit of the act which is to be made highly transparent. Kohli added the conduct is biased and unfair.
Hence, they withdrew from the process and formally took down their resolution plan while they are reserving all rights, including the right to submit a fresh resolution plan within the newly communicated deadline.
The journey of RCom before the IRP
Before the bidding process began, RCom tried to sell its assets to a various company which includes Reliance Jio, but things did not turn out well. Even Reliance Jio cancelled their agreement to buy the assets as they did not want to bear the burden of past liabilities of RCom.
Henceforth, the Insolvency process started on the application made by Ericsson when RCom failed to clear their dues. After that, NCLT proceeded with the application and IRP was appointed. As per the report, total dues of RCom is around Rs 33,000 crores and the claims submitted by the lender is of Rs 49,000 crore in August.