Back in June, the National Company Law Tribunal (NCLT) had approved UV Asset Reconstruction Company Ltd. (UVARCL) to run Aircel’s small units such as enterprise and bulk SMS divisions. The company had to work out a resolution plan for Aircel. But now, the Department of Telecommunications (DoT) has challenged the decision of Aircel’s resolution plan. DoT believes that Aircel's resolution plan is actually a liquidation plan. The plan is not aimed at reviving the telco. Instead, it is just liquidising the telco’s assets. The resolution plan proposed by UVARCL also includes the transfer of spectrum which is not allowed now after the decision made by SC on AGR dues case.
UVARCL Planning to Sell Assets to Pay off Creditors
As per a report from ET Telecom, DoT has filed an affidavit saying that the resolution plan submitted by UVARCL and approved by NCLT is against law and doesn’t adhere to the NIA conditions and license agreement. The telecom department further observed that UVARCL has planned to sell all the assets of the company so that it can pay off the creditors. But it is against the object of the code of revival as per DoT.
One of the key moves of the resolution plan for Aircel included the sale of spectrum. But as per the decision of SC, that can’t happen anymore and this is also going to affect the resolution of RCom. As of now, Aircel owes Rs 14,000 crore to DoT as the telecom department was an operational creditor and adding to that, owes Rs 12,389 crore in AGR dues.
DoT said in its affidavit that the move from UVARCL for the resolution of Aircel includes the sale of spectrum and license without first taking the permission of the DoT or licensor which is against the license agreement. The resolution plan is not aimed to provide telecom services, but only to sell the spectrum to a prospective buyer. This is not the reason why the responsibility of resolution was transferred to UVARCL observes DoT.