Reliance Communications (RCOM) has anounced that it has filed for bankruptcy with the National Company Law Tribunal (NCLT) in Mumbai, after its debt resolution plans have failed since the invocation of Strategic Debt Restructuring (SDR) on 2nd June 2017. Despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetization plans, and the overall debt resolution process is yet to make any headway, said the company.
The main unresolved challenges are:
- Lack of 100% approvals and consensus, as mandated by RBI’s 12th February 2018 circular, on all important issues, amongst over 40 lenders, Indian and foreign despite the passage of 12 months and over 45 meetings
- Pendency of numerous legal issues at High Courts, TDSAT and Supreme Court impeding progress at various stages
Last year it sold its Media Convergence Nodes (MCNs) and related infrastructure assets, worth Rs 2,000 crore and its fiber and related infrastructure assets, worth Rs 3,000 crore, to Reliance Jio Infocomm Limited (RJIO) to pay its debt to its lenders, but this was not enough as it had debt of Rs. 47,000 crore.
RCOM will seek fast track resolution through NCLT, Mumbai, and 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.
RCOM and only two of its subsidiaries, Reliance Telecom Ltd. and Reliance Infratel Ltd., will take appropriate steps shortly to implement the Board decision. The company said that there will be no impact on the business and operations of other subsidiaries of the Company, including inter alia GCX, Reliance IDC, etc.