Anil Ambani-led telco Reliance Communications has offered an upfront payment of Rs 500 crore to the Swedish manufacturer, Ericsson which filed a petition in the NCLT against RCom pushing the telco towards insolvency. During the hearing of the National Company Law Appellate Tribunal, which happened yesterday, Kapil Sibal, who stood for Reliance Communications suggested that an upfront payment be made to Ericsson. Chairman Justice S J Mukhopadhaya who heads the NCLAT bench vouched for a settlement for both the parties. The bench commented “You know the fate of operational creditors (In corporate resolution process). You may not even 5%. If you want we would give you time for settlement.”
Ericsson’s counsels who were also present in the hearing remarked that the dues totalled to Rs 978 crores which had now risen to Rs 1,600 crore. On this, the bench said “If you want, we can allow settlement. Find out ways and means to solve the issue.”
The appellate tribunal has listed that RCom be heard tomorrow for its plea against the NCLT order which has passed for the insolvency of the telco. If gone through, this would mean that all the assets of Reliance Communications would freeze, barring it from selling its wireless assets to recover some amount.
Kapil Sibal, the counsel of Reliance Communications presented some numbers in front of the bench as he spoke that the total debt of Rs 46,000 was over RCom’s head, he also did not forget to add that Reliance Jio, which was offering to buy RCom’s assets was agreed on paying Rs 17,000 crore upfront. The deal would also include spectrum dues and transfer of debts.
Ericsson had signed a 7-year deal long back in 2014 to operate and manage RCom’s nationwide telecom network. Later the Swedish company alleged that it had not been paid the dues and that the Anil Ambani led telco has defaulted on the payment. It was in September last year that the Swedish company filed a petition in the NCLT’s Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that according to their allegations, RCom allegedly owes it.
It was on May 15 that the Mumbai bench of the National Company Law Tribunal (NCLT) finally admitted an insolvency petition by Ericsson against Reliance Communications and two of its subsidiaries in lieu of recovering pending dues.