A Helpless RCom Goes For Insolvency

Anil Ambani-led Reliance Communications or RCom, once a leading force in Indian telecom, has decided to approach National Company Law Tribunal (NCLT) for debt resolution as it lost all hopes of arranging money on its own.

The company announced the same on Friday that the Board has decided to file for insolvency.

“The Board decided that the Company will seek fast track resolution through NCLT, Mumbai,” RCom said in a statement Friday. “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.”

This development came within weeks of Ericsson petitioned the Supreme Court to put restrictions on Anil Ambani from flying away from the country. The petition allegedly also requested for arrest of Ambani.

RCom has a debt of over Rs 46,000 crore top paid to over 20 lenders.

The company stated that its Board of Directors had reviewed the progress of its debt resolution plans. However, the Board noted that, ‘despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetization plans, and the overall debt resolution process is yet to make any headway.’

RCom said ‘despite the passage of 12 months and over 45 meetings’ it has become difficult to get  ‘100% approvals and consensus’.

The company had posed its last hope on brother Mukesh Ambani’s firm Reliance Jio to raise money by selling its wireless infrastructure and other assets. However, that hope also got shattered as the proposal has not got a clear approval from the Department of Telecommunications or DoT.

To complete the assets sale deal with RCom, Jio wanted an immunity from the telecom ministry that no dues prior to the deal, if any, will be imposed on it. DoT refused to grant the protection that led to an unofficial collapse of the big brother-small brother deal.

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