Majority of Foreign, Indian Lenders Have Opposed China Development Bank’s Insolvency Plea: RCom

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.

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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.