An insolvency tribunal ordered bankruptcy proceedings against Reliance Communications on a petition filed by Ericsson, a development that could scupper the Anil Ambani-owned telco’s Rs 18,000-crore deal to pare debt by selling its wireless assets to Reliance Jio Infocomm, reported Economic Times.
The Mumbai bench of the National Company Law Tribunal on Tuesday admitted three petitions filed against the telco and its subsidiaries by Swedish telecom equipment maker Ericsson under the Insolvency and Bankruptcy Code. RCom once India’s second-largest mobile phone operator, now becomes the second operator, after Aircel, to be hauled through bankruptcy proceedings.
ET further informed that a two-member panel headed by Justice BSV Prakash Kumar said an IRP will be nominated in a couple of days.
RCom – burdened with Rs 46,000 crore of debt – was unable to survive the intense competition in the Indian telecom market, especially after the entry of Jio. It was forced to shut wireless operations in late 2017, after a merger attempt with Aircel fell through, mainly due to legal hurdles. It signed a deal with Jio in late December to sell its spectrum, towers, fibre and switching nodes to repay lenders, a deal that’s now in jeopardy.
As things stand, none of the bankers, secured or unsecured creditors can get anything from RCom as the company can no longer sell its assets.
