Mumbai: Shares of debt-laden Reliance Communications Ltd (RCom) tanked to Rs14.10 from an intraday high of Rs20.65 after a Reuters report said a settlement deal with Ericsson was unlikely.
The RCom stock had surged over 100% in last two sessions following a report that the company is in talks with Ericsson for an out-of-court settlement.
RCom has approached Ericsson, but with a lack of clarity around payment of dues “a settlement currently looks uncertain," Reuters quoted an unnamed person as saying. Sources said a settlement could be reached if RCom agrees to deposit outstanding dues before Ericsson withdraws its plea.
RCom shares jumped as much as 24.77% in intraday trade to hit a high of Rs20.65 after gaining nearly 57% on Thursday. Shares have now risen as much as 102% in last two sessions. So far this year, it has declined nearly 49%.
Around 1.21 million shares changed hands in a block deal, according to a Bloomberg report. However, details of buyers and sellers were not known.
However, on Thursday, NCLT declined to admit a plea by RCom to keep the court’s insolvency order in abeyance as it is in talks with operational creditor Sweden’s Ericsson to settle the dispute, Mint reported.
“Ericsson has so far not received a formal corporate proposal for the settlement", a Mint report added.
On Tuesday, NCLT admitted a plea filed by Ericsson which has stalled RCom’s plan to sell its assets to Reliance Jio Infocomm Ltd. RCom was seeking to reduce its $7 billion debt with this deal.
Ericsson has sought Rs1,154 crore from RCom and two of its arms—Reliance Telecom Ltd and Reliance Infratel Ltd—after having signed a seven-year deal in 2014 to operate and manage RCom’s nationwide network.
In December 2017, Reliance Jio agreed to buy a majority of the wireless assets of RCom for an undisclosed amount. Both companies signed agreements for the sale of wireless spectrum, tower, optical fibre network and media convergence node assets.
At the end of March 2017, RCom has a debt of Rs45,733 crore on its books.
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.