Reliance Communications, controlled by the Anil Ambani group, Friday decided to opt for insolvency proceedings through the National Company Law Tribunal (NCLT) after failing to sell assets to pay up debt to the tune of around Rs 45,000 crore.
“RCom board of directors decides upon implementation of debt resolution plans through NCLT framework,” the company said in a statement. The board of directors of RCom on Friday reviewed the progress of the company’s debt resolution plans since the invocation of strategic debt resolution on June 2, 2017.
RCom’s plan to sell spectrum to Reliance Jio, owned by Mukesh Ambani’s Reliance Industries, did not materialise. Swedish telecom firm Ericsson had earlier filed a petition before the NCLT to invoke insolvency proceedings against RCom.
The RCom 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, the statement said.
“Accordingly, the board decided that the company will seek fast track resolution through NCLT, Mumbai. 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,” said the statement.
According to RCom, this “unfortunate outcome is attributable to the unresolved challenges, including lack of 100 per cent approvals and consensus, as mandated by the RBI’s February 2018 circular, on all important issues among over 40 lenders despite the passage of 12 months and over 45 meetings”. It also cited pendency of numerous legal issues at high courts, TDSAT and Supreme Court impeding progress at various stages.
RCom and two of its subsidiaries, Reliance Telecom Ltd and Reliance Infratel Ltd, will take appropriate steps shortly to implement the board decision, it said. There will be no impact on the business and operations of other subsidiaries of the company, said RCom.
In September 2018, the company had said it will completely exit the telecom business to concentrate on real estate in the future. RCom then said it was confident of completing its asset monetisation programme of approximately Rs 25,000 crore “in the best interests of its secured lenders”.