November 30, 2017

RCom taken to Bankruptcy court by China Development Bank


An insolvency plea against Reliance Communications (RCom) has been filed by the China Development Bank in the National Company Law Tribunal (NCLT). "The application has been filed recently and a hearing is expected soon," a source said.

Earlier in 2017, Ericsson, Swedish telecom infra giant, had also filed insolvency proceedings against RCom over recovery of dues. RCom said the company has not been served any notice of the application filed by China Development Bank with NCLT.

RCom said, "The company is engaged through Joint Lenders' Forum (JLF) with all its lenders for a successful resolution of the strategic debt restructuring (SDR) process. The China Development Bank has also been actively participating in the JLF."

RCom said that the company is "surprised by the untimely and premature action" of filing an application at NCLT by China Development Bank. "The company continues to remain engaged with all lenders, including the China Development Bank and is confident and committed to a full resolution with the support of all lenders."

RCom has a Rs 47,000 crore debt and is shutting down its loss making 2G and 3G voice business across the country. The company is also looking at piece-meal sale of its various businesses, including tower assets, sub-sea cable and enterprise operations to get some finance.

RCom's poor financial position has been exacerbated after the launch of operations by Reliance Jio in September last year. The continuing losses and failure of a merger deal with Aircel has lent a blow to RCom's efforts for a revival.

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