Anil Ambani’s Reliance Communications opts for insolvency after failure to sell assets to repay debt

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New Delhi: Reliance Communications has determined to go for insolvency proceedings following its failure to promote belongings for paying again its lenders, the Anil Ambani-led telecom agency stated on Friday.

RCom even did not promote spectrum to Mukesh Ambani’s Reliance Jio, a deal that was anticipated to carry some reduction to the cash-strapped firm.

File image of Anil Ambani. PTI

File picture of Anil Ambani. PTI

“RCom board of directors decides upon implementation of debt resolution plans through NCLT framework,” the corporate stated in an announcement.

Swedish telecom gear maker Ericsson had filed the primary petition earlier than Nationwide Firm Regulation Tribunal (NCLT) to invoke insolvency proceedings in opposition to RCom. The NCLT on the request of RCom had granted it time to clear dues to keep away from insolvency proceedings.

It’s estimated that RCom has been reeling underneath debt of over Rs 46,000 crore.

The board of administrators of RCom on Friday reviewed the progress of the corporate’s debt decision plans for the reason that invocation of strategic debt decision on 2 June 2017.

The Board famous that regardless of the passage of over 18 months, lenders have obtained zero proceeds from the proposed asset monetisation plans, and the general debt decision course of is but to make any headway, the assertion stated. “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,” the assertion stated.

The corporate had chalked out plans to promote belongings for about Rs 25,000 crore and use it for clearing debt of round 40 lenders.

RCom was anticipating to understand Rs 975 crore from sale of spectrum to Jio which it promised to make use of paying dues of Rs 550 crore to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel.

Reliance Jio, nonetheless, declined to take over any previous legal responsibility of RCom for which the Division of Telecom could increase demand in future.

(Disclosure – Reliance Industries Ltd. is the only beneficiary of Unbiased Media Belief which controls Community18 Media & Investments Ltd)

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