Reliance Communications CIRP: NCLT allows substitution of resolution applicant

The National Company Law Tribunal (NCLT) has approved the substitution of UV Asset Reconstruction Company Limited (UVARCL) with its affiliate, UV Stressed Asset Management Private Limited (UVSAMPL), as the resolution applicant for Reliance Communications Limited (RCOM), the company said in an exchange filing.

This development comes after the Reserve Bank of India issued new guidelines for ARCs in October 2022, under which UVARCL did not meet certain eligibility criteria. The resolution plan for RCOM, submitted by UVARCL, was approved by the company’s creditors in March 2020 but awaited final approval from the NCLT.

UVARCL filed an application with the NCLT seeking permission to substitute itself with UVSAMPL, and the court granted the application on December 12, 2023.

This move paves the way for the finalization of RCOM’s resolution plan and its exit from the insolvency process. The written order from the NCLT is awaited and will be shared with the stock exchanges upon availability.

Reliance Communications, once India’s second-largest telecom company, was dragged to insolvency court in May 2018 by Ericsson India Pvt Ltd for defaulting on a payment of Rs 978 crore.

Ericsson has filed three different petitions against Reliance Communications, Reliance Infratel Ltd, and Reliance Telecom Ltd. The three petitions were consolidated into one in 2019.

The resolution plan filed before this Tribunal is pending for approval in view of issue pertaining spectrum being sub-judice before Hon’ble Supreme Court.

Key Timeline:

• March 2020: Creditors approve the resolution plan submitted by UV Asset Reconstruction Company Limited (UVARCL).
• October 2022: RBI issues new guidelines for ARCs, rendering UVARCL ineligible.
• December 2023: NCLT approves the substitution of UVARCL with UV Stressed Asset Management Private Limited (UVSAMPL) as the resolution applicant.

Current Status:

• RCOM’s resolution plan is still awaiting final approval from the NCLT.
• The written order regarding the substitution of UVARCL with UVSAMPL is awaited.
• Once the order is finalized, RCOM will exit the insolvency process.

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