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.

Cash-strapped DHFL not to make any payment to lenders, bondholders

The Corporate Insolvency Resolution Process (CIRP) was initiated against the debt-ridden company as per the provisions of the Insolvency and Bankruptcy Code, 2016 with effect from December 3, 2019.

Dewan Housing Finance Corporation (DHFL) on Tuesday said it will not make any interest or principal payment to lenders as well as bond holders as the company is under resolution process.

The Corporate Insolvency Resolution Process (CIRP) was initiated against the debt-ridden company as per the provisions of the Insolvency and Bankruptcy Code, 2016 with effect from December 3, 2019.

DHFL said all the rated debt papers of the company are carrying default grade ratings and disclosures on the same have been made to the exchanges.

ALSO READ: NBFC-MFIs seek clarity from RBI on 3-month moratorium on loans

The creditors of the company were duly informed about commencement of the CIRP and were requested to submit their claims to the company in the prescribed manner as per the provisions of the Code.

The amounts to be received towards the dues by the creditors will be based on a resolution plan to be approved in due course by the NCLT, Mumbai, DHFL said in a regulatory filing.

The non-banking finance company (NBFC) further said that it is under moratorium and dues to lenders and bond holders will remain in abeyance until the CRIP is completed.

CG Power fraud: Thapar cites board approvals, denies fund misuse charges

CG Power board sacked Thapar after an audit report by Vaish Associates, which itself is based on as many as 23 disclaimers, claimed that Thapar swindled Rs 3,000 crore from CG Power.

Market News : Citing regular board approvals for various inter-corporate loans, former CG Power Industrial Solutions' non-executive chairman Gautam Thapar has refuted allegations of fund misuse amid alleged governance lapses coming under the regulatory scanner, according to documents submitted by him to the government.

In a 36-page submission to the corporate affairs ministry early November, Thapar, who was sacked in a boardroom coup in the wee hours of August 30, has provided documents on various issues, including inter-corporate loans, minutes of board meetings and loans from lenders like Standard Chartered Singapore and Yes Bank.

CG Power board sacked Thapar after an audit report by Vaish Associates, which itself is based on as many as 23 disclaimers, claimed that Thapar swindled Rs 3,000 crore from CG Power.

Markets regulator Sebi banned Thapar and entities associated with him for three years, following which he moved the Securities Appellate Tribunal, which has asked the company to provide relevant documents to him.

The Serious Fraud Investigation Office (SFIO) has also started a probe against CG Power and 15 group entities. The ministry has moved NCLT Mumbai seeking to restate the books of accounts of CG Power from FY16. An order is expected on Monday.

The documents, seen by PTI, show how Standard Chartered Singapore extended a $44-million lifeline to CG Singapore in February 14, 2018. The entire money was then paid to CG International Netherlands through another group entity AIA and Avantha. The same amount was fully transferred back to CG International Netherlands on the very same day.

Later, the company in turn paid back the entire amount to StanC Singapore, thus making the account standard, show the documents.

While a major allegation revolves around funds moving in and out of CG Power and group entities, Thapar has claimed that such a route was taken following suggestions from lenders since CG Power was facing liquidity issues.

Similarly, Aditya Birla Finance and Yes Bank allowed CG Power to get funds between 2016 and 2019 in a similar manner as StanC did in 2018, showed the documents.

Fresh funds likely to help housing projects move out of 'stuck' status

The completed and sold projects will start the repayment cycle, reducing bad loans.

The permission to use the Rs 25,000-crore fund for the real estate sector announced by the Union government on Wednesday to revive projects declared non-performing assets or even sent to the National Company Law Tribunal (NCLT) is likely to reduce the stress on the books of lenders.

Senior officials of public sector banks said the fine print was still awaited, but the new fund will help move projects out of the “stuck” status.

The completed and sold projects will start the repayment cycle, reducing bad loans. Bankers said while lenders were getting repaid, clear rules should be in place about who gets paid first.

Amit Goenka, managing director and chief executive officer at Nisus Finance, said the alternate investment fund proposed by the government should have a bottoms-up approach.

The affordable housing projects stuck or delayed should get priority in funding, as that would bring in a large number of competed dwellings in the market.

Along with the AIF, the regulator and the government need to work on a one-time restructuring scheme for good projects which are stuck or delayed for want of funding and approvals.

This will unclog many problem accounts and lead to substantial reduction of stress for banks and NBFCs, said a source who did not want to be named.

Business Standard

NCLT sets 90-day deadline for Jet Airways bankruptcy resolution

Jet stopped operations on April 17 leaving over 14,000 employees in the lurch.

The National Company Law Tribunal (NCLT) on Thursday admitted the insolvency petition moved by State Bank of India (SBI) — under section 7 of the Insolvency and Bankruptcy Code (IBC) — against Jet Airways, and instructed that the resolution process be wrapped up in 90 days as the matter is of national importance.

Typically, the corporate insolvency resolution process (CIRP) should be completed in 180 days, and an extra 90 days’ time is granted in case the process doesn’t conclude in the stipulated period. The interim resolution professional (RP) has been instructed to submit fortnightly progress reports on the CIRP process, with the first to be filed on July 5, the day of the next hearing.

The tribunal also declared a moratorium on recovery of dues from Jet, the country’s first aviation firm to be admitted for bankruptcy. Jet had over 120 planes, of which only about a dozen have not been de-registered by the civil aviation regulator. The rest of the planes had their leases terminated and many of them have been inducted by other airlines in India or abroad.

Also, on a day which saw the beleaguered airline being admitted under the insolvency process, Jet shares posted their highest single-day gain on the bourses on Thursday, rising 93 per cent on the BSE to end at Rs 64 after declining 75 per cent in the previous 10 sessions. Such a movement in share prices is highly unusual.

ALSO READ: Jet Airways: Exit is best

Moreover, presiding judges V P Singh and Ravi Kumar Duraisamy did not take cognizance of the Dutch court order that had declared Jet bankrupt, given that cross-border insolvency is still not in place under the IBC and because the jurisdiction of the corporate debtor rests with the tribunal (as the company is listed in India).

SBI, in its plea, said the airline had defaulted on working capital loans of up to Rs 970 crore. Jet had a working capital facility of Rs 505 crore. This account was overdrawn by around Rs 460 crore for 30 days. The lender had also provided a term loan facility of Rs 1,292 crore to the carrier, which owes over Rs 8,000 crore to a consortium of 26 lenders.

Business Standard