INSUBCONTINENT EXCLUSIVE:
RCom has said it plans to reduce its debt by selling assets.Mumbai: The National Company Law Tribunal (NCLT) on Tuesday admitted an
insolvency plea filed by Sweden's Ericsson against Reliance Communications, potentially delaying the Indian firm's plans to sell assets to
Ericsson, which signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide telecoms network, is seeking
11.55 billion rupees ($170 million) from the company and two of its subsidiaries.Worries about the ability of RCom, as the company is widely
known, to repay its near $7 billion debt to Indian and foreign banks have been mounting for more than a year
Like other incumbents in India's telecoms sector, RCom has been hit by a fierce price war over the last year, especially after the entry of
Reliance Jio, which offered free voice and cut-price data plans.Run by wealthy businessman Anil Ambani, RCom has said it plans to reduce its
debt by selling assets such as airwaves, mobile masts and fibre optic investments.The company also plans to sell most of its wireless assets
to Reliance Jio - controlled by the country's richest man and Anil's elder brother Mukesh Ambani - in a deal sources said was worth about
$3.8 billion.However, Tuesday's order from the NCLT means that the asset sale would now be overseen by a court appointed administrator.A
lawyer for RCom said it would appeal
The company in a press release said it would decide the next course of action after studying the detailed orders of NCLT.Under India's
bankruptcy law, insolvency resolution needs to be completed within a maximum 9 months, failing which the company is liquidated
With debt of 457.33 billion rupees ($6.7 billion) at the end of March 2017, RCom is the most-leveraged of all listed telecoms carriers in
The company shut down its consumer mobile business late last year.RCom's asset sale plan has also stalled as it faces a separate legal
challenge after HSBC Daisy Investments (Mauritius) Ltd filed a petition accusing the company of oppression of minority shareholders and
operational mismanagement.RCom shares closed down 8.2 percent on Tuesday in a broader Mumbai market that ended largely unchanged
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