Friday, June 19, 2020

UV Asset Reconstruction permitted to sell Aircel's spectrum rights


The order is on the resolution plan for Aircel and its subsidiaries Dishnet Wireless and Aircel Cellular.


Asset management company UV Asset Reconstruction Company (UVARCL) has been permitted to sell the right to use the spectrum held by Aircel in the 1800 and 2100 bands as part of the telecom company’s resolution plan the National Company Law Tribunal (NCLT) has cleared.

The order is on the resolution plan for Aircel and its subsidiaries Dishnet Wireless and Aircel Cellular. The outstanding debt of the three companies is around Rs 58,760 crore. Financial creditors will have to take a considerable haircut in this.

According to the NCLT order, UVARCL has proposed to pay Rs 19,600 crore, of which around Rs 6,630 crore is by way of ZOCDs (zero-coupon optionally convertible debentures) and the balance of Rs 12,970 crore is paid upfront.

It was stated that UVARCL will buy equity by paying Rs 11 crore and the balance through ways such as asset monetisation, for which selling the right to use spectrum is the most feasible option; selling equipment, real estate, towers, and fibre assets; proceeds from realising claims; proceeds from the benefit of carry-forward losses; and unabsorbed depreciation.

The NCLT has endorsed the resolution professional’s proposal granting the sale.
As part of the order, UVARCL will also be able to sell optical fibre of 14,500 km and some equipment, most of which has gone obsolete. It has also been allowed to lease the tower infrastructure, in which 30 per cent is based on 3G technology.

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