RCom To Seek Debt Resolution Under Insolvency Law
RCom says it has failed to make progress on debt resolution, plans to seek insolvency resolution.
Reliance Communications Ltd. said it will approach the National Company Law Tribunal to seek debt resolution under the insolvency law after the Anil Ambani-controlled company failed to make progress on its own.
“The board noted that, despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway,” it said in a stock exchange filing. “RCom and only two of its subsidiaries, Reliance Telecom Ltd. and Reliance Infratel Ltd., will take appropriate steps shortly to implement the board decision.”
The board believes this course of action will be in the best interests of all stakeholders, ensuring comprehensive debt resolution in a final, transparent and time-bound manner within the prescribed 270 days.Reliance Communications Statement
The company, with a debt of more than Rs 47,000 crore in the previous financial year, had invoked strategic debt restructuring in June 2017. The telecom operator was expected to sell spectrum, towers, fibre and other assets worth Rs 25,000 crore to older brother Mukesh Ambani's Reliance Jio Infocomm Ltd. It’s not clear if the deal with Reliance Jio stands as the company awaited approval from the Department of Telecommunications.
It planned to repay an additional Rs 10,000 crore by selling 125-acre real estate in Navi Mumbai.
RCom said lack of consensus and approval among its over 40 lenders “despite the passage of 12 months and over 45 meetings” as mandated by the Reserve Bank of India still remains an unresolved challenge for debt resolution. Numerous pending legal issues at high courts, Telecom Disputes Settlement and Appellate Tribunal, and the Supreme Court are also impeding progress, it said.
The company said there will be no impact on business and operations of its other subsidiaries.