A play from the blindside, Delhi-based UV Asset Reconstruction Company (UVARCL) has emerged as the highest bidder for Reliance Communications (RCom) and Reliance Telecom, both of which are under National Company Law Tribunal (NCLT) proceedings.
UVARCL has put Rs 16,000 crore on the table for the distresses telcos and is willing to pay 30 percent of the sum upfront within 90 days, Business Standard reported. Both the companies are part of the Anil Dhirubhai Ambani Group (ADAG) and have dues worth of Rs 47,000 crore.
Interestingly, the same company put in the highest bid for Aircel’s assets in 2019, offering an upfront payment of Rs 150 crore by selling the assets. The deal is under consideration as the sale would mean banks take 99 percent haircut on the Rs 20,000 crore dues.
Experts, thus, say the bid would likely be turned down by banks who are part of the Committee of Creditors (CoC). The paper quoted a banker as saying that the offer for RCom is “based on deferred payments, which may not be accepted”.
Moneycontrol could not independently verify the report.
The banker added that the low upfront money offered by UVARCL was one reason why the Aircel debt resolution was not cleared.
Analysts are also unclear on whether the company plans to tie-up with a telco for the license-bound spectrum housed by RCom and Reliance Telecom. The company did not respond to queries on this, BS said.
What is UVARCL?
As per the company website, UVARCL is a securitisation/reconstruction company registered with the Reserve Bank of India (RBI).
It was set up in 2007 and promoted by professionals with equity from six public sector banks (Central Bank of India, Bank of Maharashtra, Union Bank of India, Bank of India, United Bank of India, Allahabad Bank) and two insurance companies (United India Insurance Company and National Insurance Company).
“The company acquires Non-Performing Assets (NPAs) from various banks and financial institutions … evaluate possible turnaround options and formulate the best fit strategy … to create a win-win situation for all its stakeholders,” the website statement reads.
Business Standard, however, notes that the March FY19 annual report of the company shows the largest shareholder as Shilpi Sharma, who is also a promoter with a 35.47 percent stake. While the banks collectively hold 7.7 percent, and the insurance companies 0.52 percent.
In fact, Central Bank of India, with a 5.4 percent share, was the only one among the top 10 investors. Other key investors are Anubhav Securities, Anubhav Buildtech and Sanmati Trading and Investment, which hold 9.17 percent each.
Neither Sharma nor the company responded to BS’ queries on the same.UVARCL is among the top 10 asset reconstruction companies in the country in terms of book building with a CAGR of 109 per cent over the last three years, the website said. The assets listed in its annual report of 2017-18 are concentrated in the infrastructure sector (53.68 per cent in value), followed by food processing (9.44 per cent) and steel (5.53 per cent).