Reliance Communications will opt for insolvency proceedings as it failed to sell assets to pay for its debt, the Anil Ambani-led telecom company said Friday. "RCom board of directors decides upon implementation of debt resolution plans through NCLT framework," the company said in a statement. The Board of Directors of RCom Friday reviewed the progress of the company's debt resolution plans since the invocation of strategic debt resolution on June 2, 2017.
The Board noted that, despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway, the statement said.
"Accordingly, the Board decided that the Company will seek fast track resolution through NCLT, Mumbai. 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," the statement said.
To recall, the Department of Telecommunications (DoT) did not approve RCom's asset sale to Jio. Having said that, RCom is under severe pressure from telecom gear maker Ericsson as the latter is looking for its payment. If the spectrum sale with Jio cancels, RCom will have to surrender the spectrum to DoT. Jio actually planned to enhance its 4G network with RCom' spectrum in some circles, but now, the plans will be cancelled. For the unaware, Jio and RCom last year had a deal under which the former will acquire the 4G airwaves of the latter for Rs 18,000 crore.