Tech Mahindra files insolvency petitions against Reliance Communications
Mumbai: Tech Mahindra Ltd has filed three cases against Reliance Communications Ltd (RCom) and two of its subsidiaries—Reliance Telecom Ltd and Reliance Big TV Ltd—in the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC).
Tech Mahindra joins Ericsson India Pvt. Ltd, another operational creditor of RCom, to approach the court demanding its dues from the beleaguered telecom firm of the Anil Dhirubhai Ambani Group (ADAG).
The petitions are yet to be admitted and the cases will be heard on 9 October. According to a copy of the petitions viewed by Mint, Reliance Communications owes Rs3.6 crore and Reliance Telecom owes Rs3 crore to Tech Mahindra. Reliance Big TV owes Rs1.5 crore to the IT firm. These cases were filed on 26 September.
“Tech Mahindra has filed these cases in its capacity as the operational creditor of RCom and its subsidiaries. The liabilities mentioned in the petition arise out of the service agreements between Tech Mahindra and the Reliance firms involved,” said a person with direct knowledge of the matter on condition of anonymity. Tech Mahindra declined to comment stating that the company has entered the silent period ahead of quarterly results announcements. A spokesperson for RCom also declined to comment.
Apart from Tech Mahindra, the Indian unit of Sweden’s Ericsson has also filed cases against RCom and two of its subsidiaries—Reliance Infratel Ltd and Reliance Telecom Ltd. The petitions are yet to be admitted and the case will now be heard on 6 October. RCom, with a debt pile of over Rs45,000 crore, is trying to pare its debt. The firm had announced its plans to cut debt by 60% in June this year through its merger with Aircel Ltd and stake sale in its tower business to Canada’s Brookfield Infrastructure.
On 1 October, RCom announced that the merger deal with Aircel has been called off. Rcom cited regulatory delays and opposition from the operational creditors as chief reasons for calling of its merger plans. Apart from Ericsson, RCom had been facing opposition from some of the other operational creditors like Indus Towers Ltd, Bharti Infratel Ltd and GTL Infrastructure Ltd among others.
In June, rating agency Fitch downgraded the long-term foreign- and local-currency ratings to “CCC” from “B-plus”. CCC rating indicates that “default is a real possibility”, the Fitch website shows.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.