Anil Ambani promoted telecom company Reliance Communications on Friday said that it has chose to file for insolvency as its lenders have received zero proceeds from its proposed asset monetization plans even after a period of 18 months.
Reliance Communications (RCom) has made a decision to opt for insolvency proceedings after failing to sell assets to pay back lenders, the Anil Ambaniled telecom firm said on Friday.
The company's board had met to review the progress of its debt-resolution plan since the invocation of strategic debt restructuring on June 2, 2017.More news: Hubble accidentally discovers ancient dwarf galaxy
"Resolution through NCLT is in the best interests of all stakeholders, ensuring finality, certainty and transparency through a time-bound court approved process", stated RCom on Friday.
Reliance Communications had planned to sell spectrum to Mukesh Ambani's Reliance Jio, but it did not materialise.
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.
RCom said lack of consensus and approval among its over 40 lenders "despite the passage of 12 months and over 45 meetings" as mandated by the Reserve Bank of India still remains an unresolved challenge for debt resolution. It is estimated that RCom has been reeling under a debt of over Rs 46,000 crore. They will implement the debt resolution plan through NCLT.More news: TV producer fired for graphic calling Tom Brady ‘cheater’
Besides Ericsson, RCom also needs to pay Rs232 crore to the minority shareholders of Reliance Infratel, including HSBC Daisy Investments.
To recall, past year in December, Department of Telecom rejected Rcom and Jio spectrum trading deal as it does not conform to its guidelines.
But RCom has still not paid Ericsson, triggering contempt of court petitions in the Supreme Court against the telco's chairman Anil Ambani, with the spectrum sale to Jio having been rejected by the Department of Telecommunications (DoT).More news: NFL Network Accidentally Runs Patriots Celebratory Super Bowl Ad