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New Delhi: RCom legal woes are far from over. In a move which may hit its chances of selling to Jio, Mumbai bench of the National Company Law Tribunal (NCLT), an insolvency tribunal, ordered bankruptcy proceedings against Reliance Communications on a petition filed by Ericsson, on the issue of Rs 1,150 crore in dues. This effectively at the moment stops sale of Rcom to Jio. Ericsson had contended that if the sale goes through, the lenders would get the money while operational creditors like them would be left at large. Ericsson said it had 9,000 employees working on RCom and its subsidiaries and despite promises and renegotiations on payment schedules, its dues were never cleared.
Ericsson submitted three petitions against RCom and its subsidary Reliance Infratel and all these have been admitted by the Tribunal. This marks beginning of bankruptcy proceedings against the company. This is a procedure which is currently underway in companies like Binani Cement, Essar Steel and several others which have defaulted in debt repayments.
A two-member panel headed by Justice BSV Prakash Kumar while admitting the plea, said an Interim Resolution Professional will be nominated in a couple of days.
RCom is most likely to appeal against this order of NCLT in National Company Law Appellate Tribunal (NCLAT). Separately, Reliance Infratel, subsidiary of RCom, is fighting a case against sale of assets filed by HSBC Daisy Investments and other minority shareholders in NCLAT Delhi.
RCom which is saddled with debt of Rs 46,000 crore had signed a contract with Jio as per which it was suppose to sell to sell its spectrum, towers, fibre and switching nodes for Rs 18000 crore which were to be used to pay the lenders (mainly banks) back. This deal now seems to be on weak ground. Under present circumstances none of the bankers, secured or unsecured creditors can get anything from RCom as the company can no longer sell its assets.SBI and twenty seven other banks have lent large loans to the company which it has failed to repay.
As per NCLT ruling, RCom will now be run by the IRP, who will take stock of its assets and liabilities and the amount of pending dues. If no plan is agreed upon to get the company back on track within a 270-day period, RCom will be pushed into liquidation.Tagged: Rcom NCLAT NCLT IRP JIO Ericsson