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Tuesday, July 17, 2018

China bank withdraws insolvency petition against Reliance Communications

Anil Ambani had announced that the telco has arrived at a debt resolution plan, which involved its exit from the strategic debt restructuring (SDR) scheme without conversion of any debt into equity by the lenders.

By: ENS Economic Bureau | Mumbai | Updated: January 6, 2018 1:33:23 am
Anil Ambani, chairman of Reliance Communication in Mumbai. (Express Photo: Janak Rathod)

China Development Bank (CDB) on Friday withdrew its insolvency petition against Reliance Communications (RCom) at the Mumbai bench of the National Company Law Tribunal (NCLT).

However, another insolvency petition, filed by Ericsson India against RCom and its subsidiaries, was part-heard by the NCLT on Friday and was adjourned to January 18 for further hearing. In November, Bloomberg reported citing a person familiar with the matter that China Development Bank had asked the NCLT to place billionaire Anil Ambani’s RCom under insolvency proceedings after the unprofitable mobile-phone operator failed to repay debt. RCom owes China Development Bank about Rs 9,000 crore, the report had said.

Meanwhile, Reliance Jio Infocomm (Jio), a subsidiary of Reliance Industries, announced last week it was buying a clutch of wireless assets from Reliance Communications (RCom) including wireless spectrum, tower, fibre and media convergence nodes.

The deal with Jio is part of the telco’s fresh debt reduction plan announced last month. RCom chairman Anil Ambani had announced that the telco has arrived at a debt resolution plan, which involved its exit from the strategic debt restructuring (SDR) scheme without conversion of any debt into equity by the lenders.

“We have achieved a full resolution for RCom. The resolution involves RCom exiting from a SDR framework, involves no conversion of any equity to lenders, fully protecting all shareholders most importantly a zero write-off to all lenders,” Ambani had said.

According to the plan, the current debt of Rs 45,000 crore will be reduced through monetisation of assets, which include its telecom spectrum, towers, fibre, media convergence nodes (MCNs) and real estate in New Delhi, Chennai, Kolkata, Jigni and Tirupati.

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