InvestorQ : Why is Bharti Airtel bidding for the assets of RCOM and will it be positive for the stock?
Dhwani Mehta made post

Why is Bharti Airtel bidding for the assets of RCOM and will it be positive for the stock?

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Khushi Patel answered.
2 years ago
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Bharti Airtel, apart from 2 others, has submitted their resolution plans for RCOM, which is currently under insolvency proceedings. It may be recollected that Anil Ambani had offered to resign from the board of RCOM but the committee of creditors had rejected the same. Earlier, Bharti Infratel had bid for assets of RCOM but the bid was withdrawn in protest against the deadline extension made on the request of Reliance Jio.

RCOM, along with its two subsidiaries Reliance Telecom and Reliance Infratel, have a total debt of Rs.86,100 crore. China Development Bank, Life Insurance Corporation of India, State Bank of India (SBI), EXIM Bank of China and Bank of Baroda are among the 41 creditors to the beleaguered company. This is besides Rs.28,837 crore it owes to the Department of Telecommunications (DoT) in spectrum dues and other charges including its dues to operational creditors.

You need to understand why Bharti Airtel finds RCOM attractive despite having so much debt. RCOM does have some valuable assets. Its assets include spectrum, towers, fibre, data centres and real estate housed under its subsidiaries Reliance Telecom and Reliance Infratel. RCOM assets also include its allocated spectrum, 43,000 telecom towers and 178,000 route km of optic fibre. Most likely, it is these assets that Bharti Airtel finds valuable.

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