The creditors of Anil Ambani’s cash-strapped Reliance Communications are finally making it undergo bankruptcy proceedings
- The financial creditors of RCom have filed a motion in the NCLT to form a committee of creditors and appoint a resolution professional - a necessary precursor to initiating full-fledged insolvency proceedings.
- Concurrently, RCom is hoping for an exclusion of the last 13 months in the insolvency process after initial proceedings commenced last April. Under the Insolvency and
BankruptcyCode, a resolution has to be completed within 270 days.
- RCom owes around 31 creditors - mainly the State Bank of India - around ₹500 billion.
Concurrently, RCom is hoping for an exclusion of the last 13 months in the insolvency process. The company has asked the interim resolution professional for an exclusion from end-April 2018 to end-May 2019 as the initial insolvency proceedings were stayed by the National Company Law Appellate Tribunal and Supreme Court.
Under the Insolvency and Bankruptcy Code, a resolution has to be completed within 270 days.
RCom owes around 31 creditors - mainly the State Bank of India - around ₹500 billion. The cash-strapped company discontinued its core telecom business two years ago after the entry of Mukesh Ambani-led Jio.
In an interesting turn of events, it was actually counting on the sale of spectrum to Jio to stay afloat, a deal Mukesh Ambani reneged on because it would have meant taking partial responsibility for RCom’s dues.
RCom was counting on the deal, which involves the sale of around ₹200 billion worth of spectrum to Jio, to restructure its debt and settle its dues with a range of creditors, most notably, Ericsson, which is still waiting on a ₹5.5 billion principal payment in addition to interest.
After Ericcson took RCom to court and Anil Ambani was threatened with jail time, Mukesh Ambani finally stepped in and helped his brother pay down the outstanding amount.
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