Mumbai: China Development Bank (CDB) on Friday withdrew its insolvency petition against Reliance Communications Ltd (RCom). The decision follows the Anil Ambani-led telecom firm announcing a Rs39,000-crore asset monetization plan to pare its debt last month.
The lawyer for CDB sought withdrawal of the case as against its dismissal to ensure that the Chinese lender can approach the court at a later date in case the asset monetization plan does not succeed. “All this is dependent on the asset monetization plan, which will take place by March," he said. The lender also withdrew its case against Reliance Telecom Ltd, a subsidiary of RCom.
The beleaguered telecom firm owes around $2 billion to Chinese banks including CDB. The total debt of RCom as on 30 October 2017 stood at Rs45,000 crore, which it plans to bring down to Rs6,000 crore of “serviceable" debt.
In the last week of December, Ambani announced that RCom has exited strategic debt restructuring, which was invoked by its lenders in June last year. He said that the company has arrived at a debt reduction plan which includes sale of its fibre, spectrum and tower network along with development of its real estate assets and equity injection by a global strategic partner.
Ambani also said that the lenders have received final binding bids and that the bidding process has been vetted by a committee chaired by S.S. Mundra, former deputy governor at the Reserve Bank of India. The panel had been appointed by the joint lenders forum.
While CDB, a financial creditor of RCom, has withdrawn the case, the telecom operator’s operational creditor Ericsson India Pvt. Ltd is continuing its fight against the telco for non-payment of dues.
On Friday, Ericsson argued that RCom had defaulted on its payments despite rescheduling of the payment calendar multiple times. The case will be heard by the National Company Law Tribunal (NCLT) on 18 January. The Swedish network equipment provider has filed a case against RCom and two of its subsidiaries—Reliance Telecom and Reliance Infratel Ltd.
According to the firm, RCom and its subsidiaries together owe Rs1,154 crore to Ericsson. RCom, however, has raised certain objections with respect to discrepancies in the amount outstanding.
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.