INSUBCONTINENT EXCLUSIVE:
MUMBAI: Shares in Reliance Communications fell sharply by over 50 per cent on Monday as the company said it will move the insolvency
tribunal for bankruptcy protection.
The move, the telco said, will help it sell assets in a time-bound manner, having failed to do so in the
past 18 months.
The RCom stock was down by more than 50 per cent at one point, trading at Rs 5.30 on the NSE today
Following RCom's statement on Friday, Ericsson now is set to file an application in the Supreme Court, pleading that Reliance
equipment maker its dues.
Ericsson has chalked out its options to ensure it gets its settlement amount of Rs 550 crore, people aware of the
the time of filing the report.
RCom had on Friday said it plans to move the National Company Law Tribunal (NCLT) for bankruptcy protection,
conceding that it had failed to complete its spectrum sale to Jio due to the telecom department's refusal to clear it and the matter being
dragged to various courts
The company expects this move to help it sell assets, repay lenders and pare its Rs 42,000 crore debt within 270 days, having been unable to
do so in the past year and a half.
The telecom operator on Sunday said its asset monetisation plan is still on, indicating its deal with
Reliance Jio Infocomm (Jio) stands
It also said failure to get no objection certificate from lenders forced its hand.
Under NCLT, a resolution can be reached with NoC of 66
businesses like Global Cloud Exchange (GCX), India Data Centres (IDC) and Indian enterprise business, development of 30 million square feet
at the Dhirubhai Ambani Knowledge City complex, and sale of real estate assets.
The telco had charted an asset monetisation plan of selling
its wireless assets to Jio and some land parcels to Canadian firm Brookfield for Rs 18,000 crore, but a large part of the deal is stuck
He added that the telco owes its lenders Rs 38,000 crore, of which Rs 19,800 crore belong to Indian lenders and Rs 18,200 crore to foreign
ones.
DoT has refused to clear the RCom-Jio spectrum trading deal, saying it didn't conform to rules after Jio refused to be held liable for
the seller's past dues of Rs 2,947 crore
Jio still retains that stance.
In its latest statement, RCom reiterated that it will take steps to fast-track resolution through NCLT in
comment on its dispute with Ericsson and the Supreme Court order
But sources within RCom said payments to all operational creditors will be made in accordance with the NCLT process.
Ericsson, however, will
continue to pursue contempt case against Ambani, sources said
the person said further.
So far, the Swedish company has filed two contempt petitions against Ambani for repeatedly failing to pay the dues
despite SC orders.
The SC in January had said the RCom chairman will have to appear in court at the next date of hearing in the contempt
thought it was very close to getting its payments.
The fear of losing out is further stoked because as per a recent order of the apex court,
operational creditors are not at par with financial creditors who have the first claim over money coming through insolvency proceedings,
