In an indication that the out-of-court settlement talks with Ericsson has failed, the Directors of Reliance Communications Ltd and two of its subsidiaries Reliance Telecom and Reliance Infratel filed appeals before the National Company Law Appellate Tribunal (NCLAT) challenging the National Company Law Tribunal (NCLT) decision to allow an application from Ericsson under the insolvency process. RCom has also sought a stay of the NCLT order.
Ericsson had moved the NCLT seeking bankruptcy proceedings against RCom and its two units (Reliance Infratel and Reliance Telecom) to recover dues of ₹1,150 crore.
Following the bankruptcy filings, RCom’s market cap nosedived to about ₹2,900 crore as the stock prices fell by 15 per cent to touch a low of ₹9.95 on May 16.
However, the executives of RCom and Ericsson met and decided to try for an out-of-court settlement.
RCom’s latest move to file a plea in NCLAT signals that the talks have not resulted in any deal.
This raises questions on RCom’s deal with Relaince Jio.
In December 28, 2017, Mukesh Ambani-led RJio had emerged as the white knight to acquire the wireless assets of RCom, controlled by his younger sibling, Anil.
While the companies did not divulge the financial details, banking sources pegged the deal at ₹23,000 crore.
This was seen as a bailout for Anil Ambani-controlled RCom, which has been struggling under a huge debt pile.