SC AGR hearing HIGHLIGHTS: Why did telcos go insolvent? Hearing adjourned to Aug 14; AGR dues verdict awaited

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Updated: August 10, 2020 5:13:15 pm

Supreme Court AGR dues hearing HIGHLIGHTS: Supreme Court has adjourned the hearing on telecom companies under insolvency to Friday, August 14.

Solicitor General Tushar Mehta told SC that the government has to recover Rs 31,000 crore from RCom

Supreme Court AGR dues hearing HIGHLIGHTS:  The Supreme Court has adjourned the hearing on telecom companies under insolvency to Friday, August 14. Solicitor General Tushar Mehta told SC that the government has to recover Rs 31,000 crore from Reliance Communications. The apex court questioned the government’s stance on the matter. “What is the government plan to recover money from RCom?” SC asked. Senior lawyer Shyam Divan, who appeared for Reliance Communications, told SC that Ericsson’s claim was for Rs 1,677 crore. Insolvency proceedings began on account of claims made by operational creditor Ericsson, China Development Bank. Divan further informed that RCom had withdrawn appeals from NCLT, which was allowed by NCLAT. RCom’s resolution professional also said that the monetisation process outside IBC failed due to lack of consensus among the lenders.

Solicitor General Tushar Mehta appeared for Department of Telecommunications (DoT), senior lawyer Abhishek Manu Singhvi for Bharti Airtel, Mukul Rohatgi for Vodafone Idea, senior lawyers Arvind Datar and Ramji Srinivasan for Tata Teleservices, Kapil Sibal for Hughes Communications and senior lawyer Ravi Kadam for Aircel. So far, Bharti Airtel has paid Rs 18,004 crore out of total dues of Rs 43,000 and Vodafone Idea paid Rs 7,854 crore out of its total AGR dues of around Rs 58,000 crore. As per the DoT estimates, telecom companies owe a total of Rs 1.19 lakh crore, of which it has received Rs 26,896 crore so far, with balance at Rs 92,520 crore.

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Highlights

    17:10 (IST)10 Aug 2020
    RCom share price hit 5% lower circuit

    Reliance Communications shares declined 4.68 per cent to hit lower circuit at Rs 2.65 apiece.

    17:04 (IST)10 Aug 2020
    Bharti Airtel shares slipped nearly half a per cent

    Bharti Airtel share price fell 0.40 per cent to close at Rs 558.35 apiece on BSE in Monday's session. The stock hit intraday high of Rs 565.05 and low of Rs 555.

    17:01 (IST)10 Aug 2020
    Vodafone Idea share price ends nearly 3% higher

    Vodafone Idea share price settled 2.94 per cent higher at Rs 9.09 apiece on Monday. It quoted intraday high of Rs 9.19 and low of Rs 8.82 apiece.

    16:59 (IST)10 Aug 2020
    Vodafone Idea ARPU now at Rs 114

    Vodafone Idea’s net operating revenues slipped 9.3% sequentially and 5.4% on-year basis to 10,659 crore. Average Revenue Per User (ARPU) has also been falling for Vodafone Idea, now at Rs 114 against Rs 121 in the previous quarter.

    16:58 (IST)10 Aug 2020
    Vodafone Idea net loss of Rs 25,460 crore aided by more provisioning

    Vodafone Idea’s net loss of Rs 25,460 crore was aided by more provisioning in the wake of the AGR dues

    16:36 (IST)10 Aug 2020
    SC adjourned insolvency hearing to Aug 14

    Supreme Court has adjourned hearing on the insolvency of telecom companies to August 14, 2020.

    16:26 (IST)10 Aug 2020
    How spectrum cannot be sold under the IBC: SC to SG

    Supreme Court asks Solicitor General to inform how spectrum cannot be sold under the IBC

    16:25 (IST)10 Aug 2020
    Assets can be sold to raise money post takeover by resolution applicant

    After the takeover by the resolution applicant, assets can be sold to raise money. AGR dues are of  Rs 12,389 crore, according to SG. After the takeover by the resolution applicant, assets can be sold to raise money.

    16:23 (IST)10 Aug 2020
    Resolution plan has been approved by COC, NCLT: Ravi Kadam

    Ravi Kadam for monitoring committee for Aircel, says resolution plan has been approved by COC (committee of creditors), NCLT. 

    16:22 (IST)10 Aug 2020
    Who has allowed you to sell spectrum: SC to Aircel's counsel

    Supreme Court asked Aircel's counsel, "Who has allowed you to sell spectrum?". Counsel Ravi Kadam said NCLT has allowed it to sell the spectrum

    16:20 (IST)10 Aug 2020
    We will sell spectrum and license: Aircel

    Aircel says we will sell spectrum and license. As per the agreement these are transferable assets as we have made upfront payment.

    16:19 (IST)10 Aug 2020
    RCom case to be taken up on Friday now

    Reliance Communications (RCom) case will be taken up on Friday, August 14, 2020, now.

    16:18 (IST)10 Aug 2020
    What is the government plan to recover money from RCom?: SC questions

    Supreme Court asks for the government's stance. "What is the government plan to recover money from RCom?" SC asked.

    16:15 (IST)10 Aug 2020
    You are getting zero: Justice Mishra to SG

    Justice Arun Mishra said to Solicitor General, "You are getting zero." Under IBC, AGR dues are classified as operational dues, and financial creditors will get the preference.

    16:10 (IST)10 Aug 2020
    File a hard copy of reply documents: Justice Mishra to Shyam Divan

    Justice Mishra asks RCom resolution professional counsel Shyam Divan to file a hard copy of reply/documents. Divan had filed soft copies. 

    16:09 (IST)10 Aug 2020
    RCom's assets in hand

    Assets in hand - RCom has continuing business to banks, PSUs and private companies as well. Spectrum will be the main asset which will be of some attraction for people who are interested in taking over the company

    16:07 (IST)10 Aug 2020
    Reliance Communications' debt on financial creditors

    Financial creditors claimed Rs 51,374 crore, but the verified amount is around Rs 49,054 crore.

    16:00 (IST)10 Aug 2020
    Why was CIRP process allowed to proceed, if RCom settled payment dispute with Ericsson: Justice Mishra

    Justice Arun Mishra says if RCom had settled the payment dispute with Ericsson, why was the CIRP (Corporate Insolvency Resolution Proceeding) process allowed to proceed.

    15:58 (IST)10 Aug 2020
    Monetisation process outside IBC failed due to lack of consensus among lenders

    RCom's resolution professional says monetisation process outside IBC failed due to lack of consensus among the lenders. 

    15:40 (IST)10 Aug 2020
    RCom withdrew appeals from NCLT: Shyam Divan

    Senior lawyer Shyam Divan, who appeared for Reliance Communications, said that RCom withdrew appeals from NCLT and this was allowed by NCLAT.

    15:36 (IST)10 Aug 2020
    Insolvency proceedings began on account of claims made by operational creditor: Shyam Divan

    Shyam Divan said insolvency proceedings began on account of claims made by operational creditor Ericsson, China Development Bank.

    15:35 (IST)10 Aug 2020
    RCom's resolution professional says Ericsson's claim was for Rs 1,677 cr

    Reliance Communications' resolution professional says Ericsson's claim was for Rs 1,677 crore. 

    15:30 (IST)10 Aug 2020
    Shyam Divan appears for RCom

    Senior lawyer Shyam Divan appeared for Reliance Communications. He is taking through the resolution process of RCom. 

    15:28 (IST)10 Aug 2020
    Why there was a delay in filing an appeal in govt's case?: SC asks SG

    SC asks SG why there was a delay in filing an appeal in govt's case that spectrum cannot be part of the sale of insolvency assets. "What if the spectrum is sold in the meanwhile?" Justice Shah asks SG.

    15:27 (IST)10 Aug 2020
    SC wants to know the cause of initiation of insolvency for telcos

    SC wants to know the cause of initiation of insolvency for telcos under IBC, want to know if there was any urgency by telcos in pushing for insolvency. 

    15:27 (IST)10 Aug 2020
    This is how the government takes care of public interests: SC

    SC tells SG "this is how the government takes care of public interests". The observation came after the SG couldn't answer why the government didn't appeal in time against NCLT's order that allowed the sale of spectrum, the stand opposed by DoT, which says it can't be sold.

    15:25 (IST)10 Aug 2020
    Objections to spectrum sale by RCom still under consideration: SG

    Solicitor General is not able to answer why there was a delay in filing a reply as sought by the Supreme Court. SG says objections to spectrum sale by RCom still under consideration.

    15:23 (IST)10 Aug 2020
    Government to recover Rs 30,000 crore from RCom

    Government has to recover Rs 30,000 crore from Reliance Communications. SG Tushar Mehta said Aircel's resolution plan is finalised, RCom's resolution plan about to be finalised. 

    15:22 (IST)10 Aug 2020
    Government is a trustee of natural resources

    Department of Telecommunications (DoT) says all three cases are at different stages of insolvency. Government is a trustee of natural resources. 

    15:21 (IST)10 Aug 2020
    We have said before NCLT that no one can own spectrum: SG Tushar Mehta

    We have said before NCLT that no one can own spectrum. Even the government holds it in trust for the people of India, says SG Tushar Mehta. 

    15:13 (IST)10 Aug 2020
    SC begins hearing in AGR case

    Supreme Court begins hearing in adjusted gross revenue (AGR) case. 

    15:08 (IST)10 Aug 2020
    Kapil Sibal to appear for Hughes Communications

    Senior lawyers Arvind Datar, Ramji Srinivasan will appear for Tata Teleservices, senior lawyer Kapil Sibal for Hughes Communications and senior lawyer Ravi Kadam to appear for Aircel. 

    15:07 (IST)10 Aug 2020
    SG Tushar Mehta to appear for DoT

    Solicitor General Tushar Mehta to appear for Department of Telecommunications (DoT). Senior lawyer AM Singhvi for Bharti Airtel, Senior lawyer Mukul Rohatgi for Vodafone Idea. 

    15:04 (IST)10 Aug 2020
    Vodafone Idea net operating revenues slipped 9.3% sequentially

    Vodafone Idea’s net operating revenues slipped 9.3% on-quarter basis and 5.4% on-year basis to 10,659 crore. Average Revenue Per User (ARPU) has also been falling for Vodafone Idea, now at Rs 114 against Rs 121 in the previous quarter. Kotak Institutional Equities in a report said that the numbers were hit by the coronavirus which affected customers and a weakening subscriber mix for the telco.

    15:00 (IST)10 Aug 2020
    Motilal Oswal Financial Services sees a bleak future for Vodafone Idea

    Motilal Oswal Financial Services in a report said for a 20-year timeframe, Vodafone Idea would require to pay Rs 5,100 crore. Owing to the high leverage and huge cash requirements, the brokerage firm sees a bleak future for Vodafone Idea.

    14:59 (IST)10 Aug 2020
    SC clarified reassessment not possible

    The SC clarified that reassessment would not be possible and it would rely on demands issued by the DoT. Vodafone Idea said that it is not seeking recalculation and neither is it revisiting demand.

    14:57 (IST)10 Aug 2020
    Vodafone Idea may have to pay Rs 6,000 crore yearly instalment if SC grants 15-yr AGR payment window

    Research and brokerage firm Motilal Oswal Financial Services estimated that Vodafone Idea may have to pay Rs 6,000 crore per year if the court grants a 15-year timeframe. “Considering dues at 8% interest rate VIL would require to pay an annual amount of Rs 5,900 crore if the SC grants a time frame of 15 years,” the brokerage firm said.

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    14:55 (IST)10 Aug 2020
    Voda-Idea shares up 12% since Friday; slipping revenues remain a worry as eyes stay glued on AGR dues

    Struggling telecom major Vodafone Idea has seen a sharp decline in operational performance in the April-June quarter while much of the focus remained on Adjusted Gross Revenue (AGR) dues. This poses a significant challenge to the company of regaining competitiveness, and massive balance sheet repair could be needed, said Kotak Institutional Equities in a report.

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    14:52 (IST)10 Aug 2020
    So far Bharti Airtel paid Rs 18,000 crore, Vodafone Idea Rs 7,854 crore

    Bharti Airtel has paid Rs 18,004 crore out of total dues of Rs 43,000 and Vodafone Idea paid Rs 7,854 crore out of its total AGR dues of around Rs 58,000 crore, so far. 

    14:49 (IST)10 Aug 2020
    Bharti Airtel, Vodafone Idea demand 15-yr timeframe to pay AGR dues

    Bharti Airtel, Vodafone Idea scaled down their demand from 20-year timeline to 15 years in the previous hearing. Tata Teleservices sought 7-10 years for the payment of AGR dues

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