The National Company Law Appellate Tribunal (NCLAT) on Wednesday halted insolvency proceedings against Reliance Communications (RCom) after the telco agreed to pay Ericsson an amount of Rs 550 crore as part of its dues to the operational creditor. The decision would allow RCom to sell its assets to repay lenders as part of its plan to pare debt. “The corporate insolvency resolution process, in relation to the corporate debtor — Reliance Infratel, Reliance Telecom and Reliance Communications — shall remained stayed until further order,” the NCLAT said. RCom had moved the NCLAT after the Mumbai bench of the National Company Law Tribunal (NCLT) admitted insolvency pleas filed against it by Ericsson over dues of nearly Rs 1,000 crore.
The appellate tribunal noted the chairman/managing director/director of RCom would undertake to pay Rs 550 crore to Ericsson within 120 days. The company has time till September 30 to repay Ericsson and in case of non-payment the interim order with regard to the resolution process will continue, the NCLAT said. “Taking into consideration the fact that, if the resolution process continues, the financial creditors and the operational creditors may suffer. In this backdrop, we say that the impugned orders of May 15 and May 18 passed by the adjudicating authority (NCLT, Mumbai) be stayed,” the appellate tribunal said, adding that RCom and Ericsson will file affidavits by June 7 stating that they will abide by the settlement.
Tushar Mehta, the counsel appearing on behalf of the joint lenders’ forum, told the court that assets of RCom will be sold for Rs 18,100 crore and the money will be used to repay its lenders. On Tuesday, the NCLAT had suggested RCom and its operational creditor Ericsson resolve their dispute over the latter’s unpaid dues. RCom had said in December last year that the current debt of Rs 45,000 crore will be reduced through monetisation of assets which include its telecom spectrum, towers, fibre, media convergence nodes (MCNs) and real estate in New Delhi, Chennai, Kolkata, Jigni and Tirupati. It had later announced that it has signed definitive binding agreements with Reliance Jio Infocomm for sale of wireless spectrum, tower, fibre and MCN assets. – Financial Express