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Ericsson rejects two proposals from RCOM for out-of-court settlement

May 28, 2018

Ericsson has rejected two offers from Reliance Communications (RCOM) in a bid to settle a debt dispute of Rs 11.5 billion.

RCOM had offered either a payment guarantee by another company controlled by Anil Ambani or an undertaking by the directors of RCOM and two of its subsidiaries, Reliance Infratel and Reliance Telecom to clear dues within 15 days if Ericsson withdrew its petition.

Meanwhile, the interim resolution professionals (IRPs) appointed by the NCLT for Reliance Infratel and Reliance Telecom have asked creditors to submit details of dues owed by the two companies. With the companies coming under the control of IRPs, RCOM can no longer sell assets on its own. It had signed a deal with Reliance Jio Infocomm Limited (RJIL) to sell its spectrum, towers, fibre and switching nodes Rs 180 billion in order to pare debt. RCOM’s total debt amounts to around Rs 450 billion.

Recently, RCOM said it was in talks with Ericsson to settle the dispute out of court. Earlier, the NCLT admitted Ericsson’s three insolvency petitions against RCOM and its subsidiaries. The decision came after around nearly eight months since the Swedish telecom equipment maker moved the NCLT’s Mumbai bench to recover Rs 11.50 billion in dues from the operator.

 
 

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