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Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
China Development Bank (CDB), a lender to Reliance Communications (RCom), has filed an insolvency case against the ailing telecom service provider, following a similar case filed by Swedish telecom gear maker Ericsson. RCom owes about Rs 7,500 crore to China Development Bank, but the amount has increased to Rs 9000 crore due to interest.
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The bank has 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. The NCLT will soon hear the bank’s insolvency plea on the admission.
According to media reports, RCom’s Indian lenders may oppose the insolvency case when it comes to hearing before NCLT. “The insolvency petition is being filed just weeks ahead of RCom lenders’ earlier announced intention to convert Rs 7,000 crore of debt into 51 percent of equity. The IBC filing is likely to derail this process so that the lenders will oppose this move,” a source was quoted as saying by Hindu Business Line.
The Anil Ambani-led telco said that it is surprised by the untimely and premature action of China Development Bank (CDB)’ in filing an application with NCLT. RCom, in a statement, said that it is engaged through the joint lenders’ forum (JLF) with all its lenders for a successful resolution of the strategic debt restructuring (SDR) process.
“CDB has also been actively participating in the JLF,” RCom said, adding that it has not been served any notice of the insolvency petition filed by CDB with the NCLT.
