Business

Anil Ambani's RCom Files For Insolvency To Repay Debt

HARSH RANJAN | 0
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| February 3 , 2019 , 18:26 IST

Reliance Communications (RCom) burdened with a mounting debt of Rs 46,000 crore and unable to sell its spectrum assets to elder brother Mukesh Ambani, said it will seek fast track resolution through National Company Law Tribunal on Friday.

The company said lenders had not received any proceeds from its asset monetisation plans, and that its overall debt resolution process had not made any progress.

The insolvency filing comes weeks after Swedish network giant Ericsson petitioned the Supreme Court to arrest Anil over recurring delays in payment of RCom’s dues worth Rs 550 crore, and accused the businessman of engaging in “gross and willful contempt” of the apex court.

RCom said in a statement "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.”

The company’s board had met to review the progress of its debt-resolution plan since the invocation of strategic debt restructuring on June 2, 2017. “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,” the statement added.

RCom said 100% approval of all 40 lenders had been “impossible to achieve” on any matter despite 45 meetings in over 12 months. Other factors that prompted it to opt for insolvency were — as the company described it — “recurring legal challenges by the department of telecom (DoT) for spectrum monetisation” and the continuing litigation by other parties.

The statement further said, “Resolution through NCLT is in the best interests of all stakeholders, ensuring finality, certainty and transparency through a time-bound court-approved process.”

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A senior official at the telecom department had said, “There is no question of giving any kind of immunity to the new buyer. It is public money, and we will take it from whoever owns it in case the corporate guarantee that RCom is providing us does not prove to be sufficient.”