New Delhi: Reliance Communications (RCom) has decided to opt for insolvency proceedings after failing to sell assets to pay back lenders, the Anil Ambaniled telecom firm said on Friday. RCom even failed to sell spectrum to Mukesh Ambani’s Reliance Jio, a deal that was expected to bring some relief to the cash-strapped company. “RCom board of directors decides upon the implementation of debt resolution plans through the NCLT (National Company Law Tribunal) framework,” the company said in a statement.
Swedish telecom gear maker Ericsson had filed the first petition before NCLT to invoke insolvency proceedings against RCom. The NCLT, on the request of RCom, had granted it time to clear dues to avoid insolvency proceedings. It is estimated that RCom has been reeling under a debt of over Rs 46,000 crore. The company’s board of directors on Friday reviewed the progress of the debt resolution plans since the invocation of the strategic debt resolution on June 2, 2017.
The board, a company statement said, noted that despite 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. “Accordingly, the Board decided that the company will seek to fasttrack a resolution through NCLT, Mumbai. The board believes that this course of action will be in the best interests of all stakeholders, ensuring a comprehensive debt resolution in a final, transparent and time-bound manner within the prescribed 270 days,” the statement said.
The company had chalked out plans to sell assets for about Rs 25,000 crore and use it for clearing debt of around 40 lenders. RCom was expecting to raise Rs 975 crore from selling spectrum to Jio. RCom had promised to pay the dues of Rs 550 crore to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel from the proceeds. Reliance Jio, however, declined to take over any past liability of RCom, for which the Department of Telecom may raise a demand in future.