RCom offers Rs 500 cr to Ericsson, NCLAT to stay insovency proceedings

The NCLAT has listed Wednesday for the hearing of the interim prayer of RCom to stay the NCLT order which has directed to start insolvency proceedings against it, based on Ericsson’s plea.

business Updated: May 29, 2018 17:35 IST
Press Trust of India
Press Trust of India
Press Trust of India, New Delhi
RCom,Reliance Communications,Reliance Infratel
A man opens the shutter of a shop painted with an advertisement of Reliance Communications in Mumbai, India.(Reuters File Photo)

RCom on Tuesday offered an upfront payment of Rs 500 crore to its operational creditor Ericsson, which has an insolvency order against the Anil Ambani group firm.

During the proceedings of the National Company Law Appellate Tribunal ( NCLAT), senior advocate Kapil Sibal, appearing for RCom, suggested an upfront payment.

The NCLAT bench headed by Chairman Justice S J Mukhopadhaya suggested settlement between the parties.

“You know the fate of operational creditors (in corporate resolution process). You may not even get 5%. If you want, we would give you time for settlement,” the bench said.

Ericsson had total dues of Rs 978 crore, which have now increased to Rs 1,600 crore, counsel appearing for Ericsson informed.

“If you want, we can allow settlement. Find out ways and means to solve the issue,” the bench said.

The tribunal has listed Wednesday for the hearing of the interim prayer of RCom to stay the NCLT order , which has directed to start insolvency proceedings against it over the Ericsson plea.

During the proceedings, Sibal said that RCom has a total debt of around Rs 46,000 crore.

He further added that RIL’s Jio, which is buying RCom’s assets, has offered Rs 17,000 crore of upfront payment along with spectrum dues and transfer of debts.

On May 15, the Mumbai bench of the National Company Law Tribunal (NCLT) had admitted an insolvency petition filed by Ericsson against Reliance Communications and two of its subsidiaries seeking to recover unpaid dues.

Ericsson, which had signed a 7-year deal in 2014 to operate and manage RCom’s nationwide telecom network, had alleged that it had not been paid its dues.

Last September, the Swedish company had filed a petition in the NCLT’s Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that RCom allegedly owes it.

First Published: May 29, 2018 17:35 IST