Reliance likely to make bid for RCom and its related companies today

Bharti Airtel also likely to reconsider its decision and bid.

Market News : Having asked for a 10-day extension from a Resolution Professional, Mukesh Ambani’s Reliance group is expected to make a bid for his brother Anil Ambani’s Reliance Communications (RCom) and its related companies on Monday.

The companies are up for grabs as going concerns from the Anil Ambani stable under the Insolvency and Bankruptcy Code (IBC) process. They include RCom, Reliance Telecom (which has the spectrum), and Reliance Telecom Infrastructure which houses the tower and fibre assets. Rcom also has subsidiaries which control its real estate and data centre businesses. The bids close on Monday and it is expected that the committee of creditors will open them on the same day for discussions.

The structure of how the bid will be made is not clear as, under the regulatory rules, a bid by Reliance Jio (which is not a listed entity) acquiring RCom (a listed entity) would require the former to merge the latter. Yet that is clearly not acceptable to the group which is looking at coming out with a separate IPO for Jio. An e-mail to Jio elicited no response.

It is also expected that Bharti Airtel, which had complained to the Resolution Professional that the extension given to Mukesh Ambani was unfair and had withdrawn its offer, might reconsider and also bid.

The others expected to put in bids include US-based PE fund Varde Partners, I Squared Capital (for Reliance Communication’s data centres and optic fibre assets), and Delhi-based UV Asset Reconstruction Company. The latter had earlier won its sole bid for the Aircel group (which was also under the IBC) for Rs 150 crore.

Bharti had already earlier announced that it would be making a conditional bid through Bharti Airtel and Bharti Infratel. A Bharti spokesperson had at that time confirmed that it had made a conditional bid primarily for the spectrum — a precious asset.

The bid conditions included that the overall consideration will primarily be in the form of the deferred spectrum payable to the government being passed on to the bidder on terms and schedules applicable to such deferred payments. The firm has refused to comment. The Interim Resolution Professional had invited prospective companies to make a bid for Anil Ambani’s companies as going concerns that had not just spectrum and a fibre network but also real estate and enterprise business as a way of recovering over Rs 33,000 crore of debt of the secured creditors.