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January 2019

ORTEL BANKRUPT


Ortel's Plight Highlights the Dire Financial Situation Faced By Most Indian MSOs.


ORTEL

Ortel Communications Limited has been a leading regional MSO for over a decade. It provides Cable TV & broadband services in the states of Odisha, Chhattisgarh, Andhra Pradesh and West Bengal.

Ortel established the country's first 2-way CATV network for Triple Play services (video, data and voice capabilities) deploying Hybrid Fibre-Coaxial (HFC) networks.

Ortel commenced business in 1995 and went public in 2015. The IPO offered shares in the ₹ 180 to 200 price band. In mid Dec 2018, Ortel share fetched little over ₹ 4 each.



DEBT TO SONY

In June 2018, Sony Pictures Networks India (SPNI) cut off its signals to Ortel, claiming unpaid dues of ₹ 12 Crores. Ortel admitted dues of ₹ 7 Crores.

Ortel appealed TDSAT against disconnection by SPNI, but in its 3 August 2018 order, tribunal refused to stay the disconnection & told Ortel to pay ₹ 7 Crores within 6 weeks.

At the TDSAT, SPNI filed documents showing that about 50 cheques issued by Ortel in the preceding 6 months, had bounced.






INSOLVENCY

On 16 September, Sony filed a petition against Ortel under the Insolvency and Bankruptcy Code, 2016 (IBC).

Ortel admitted the default.

On 29 November 2018, the National Company Law Tribunal (NCLT) admitted SPNI's insolvency petition against Ortel Communications, for initiating the corporate insolvency resolution process.

The NLCT Delhi bench also appointed an Interim Resolution Professional (IRP).

The IRP's role is to collect all information relating to the claims, assets, finances, and operations of the corporate debtor for determining its financial position, and recovery of dues to whatever extent possible, for the creditors.


BOARD SUSPENDED

In view of insolvency proceedings, the power of the Board of Directors of the company stand suspended and will instead be exercised by the IRP. n