Countering the centre’s stand on ownership of spectrum, State Bank of India (SBI) representing the Committee of Creditors (CoC) of Reliance Communications (RCOM), has told the Supreme Court (SC) that spectrum is an essential and integral part of the telco’s assets and the insolvency process would fall apart if the right to use airwaves isn’t allowed to be transferred.
According to the SBI petition, spectrum is an asset of the corporate debtor and can be subject to the resolution plan, as otherwise continuance of telcos as going concern and their transfer as going concern as per Insolvency and Bankruptcy Code (IBC) may stand frustrated. Further, it added that the lenders have provided loans to telecom companies based on the quantum of radio waves operators hold and the corporate debtors don’t want ownership of the airwaves but the right to use them.
SBI has sought the apex court’s approval to intervene in the proceedings coming up for hearing on August 14, 2020.
SBI’s plea comes after the SC questioned the sale of spectrum by bankrupt telcos RCOM and Aircel and how the government plans to recover their adjusted gross revenue (AGR) dues if all their assets were sold in the interim.