Debt-ridden Reliance Communications (RCom) said that a majority of its foreign and Indian lenders had opposed China Development Bank’s insolvency filing to recover its $1.78 billion.
In a statement, the Anil Ambani-led telecom operator said, "At a committee of creditors meeting on 29 November 2017, a majority of Reliance Communications’ lenders, foreign and Indian, aggregating 31, decided to oppose China Development Bank’s (CDB) insolvency petition against RCOM before the National Company Law Tribunal (NCLT), Mumbai."
RCom added that these lenders have decided to appoint J Sagar Associates as their legal counsel to oppose the said CDB petition at the admission stage itself.
China Development Bank (CDB), a lender to Reliance Communications (RCom), had recently filed an insolvency case against the ailing telecom service provider, following a similar case filed by Swedish telecom gear maker Ericsson to recover Rs 1,150 crore dues. RCom owes about Rs 7,500 crore to China Development Bank, but the amount has increased to Rs 9000 crore due to interest.
CBD had become the first lender to file insolvency proceedings against the debt-ridden telco, which is reeling under a Rs 45,000-crore debt. CBD has filed the suit with the National Company Law Tribunal (NCLT) in Mumbai under the Insolvency and Bankruptcy Code. In its application before NCLT, the Chinese bank nominated Abhilash Lal as an independent resolution professional, with an understanding that Alvarez & Marshal (A&M) will be his advisors to take over the company.
The NCLT will soon hear the bank’s insolvency plea on the admission.
There are now four such cases slapped against RCom post its plans to the merger with Aircel fell apart. Besides CBD and Ericsson, Manipal Technologies had approached the National Company Law Appellate Tribunal (NCLAT) to recover Rs 2.74 crore. Tech Mahindra too had filed an insolvency petition against RCom, but both parties agreed to settle dues worth Rs 8.2 crore out of court.
Under its SDR plan, RCom plans to repay up to Rs 17,000 crore through monetisation of assets, and another Rs 10,000 crore through the sale and development of real estate space. It is also looking to sell some of its assets to the Mukesh Ambani-backed Reliance Jio. Besides Jio, a number of companies, including Indus Towers, ATC, Bharti Infratel, Brookfield Infrastructure, Sistema JSFC, Tillman Global Holdings, TPG Capital, Carlyle Group, I-Squared Capital and Gateway Partners have shown interest to buy RCom’s tower unit.
Last month, RCom applied for a fresh “zero write-off” plan to its lenders, under which banks could convert some debt and take 51% stake in the telecom operator. Banks could then raise funds by selling the telco’s towers and spectrum to potential buyers including Reliance Jio and monetise real estate assets.