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Telecom equipment manufacturer Ericsson has filed an insolvency petition against Reliance Communications (RCom) with the National Company Law Tribunal (NCLT), as the tribunal began hearing of the company’s merger with Aircel.
The company had filed the petition at the tribunal’s Mumbai bench seeking recovery of Rs 491.41 crore. Ericsson has also filed similar petitions against RCom subsidiaries Reliance Infratel and Reliance Telecom for recovery of Rs 534.75 crore and Rs 129.34 crore, respectively, RCom said in a regulatory filing.
The petition was filed by Ericsson India.
Ericsson, in a separate statement, said: “Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes for services provided under a contract. As the legal process is ongoing, we don't have any further comments at this point”.
On August 14, NCLT had admitted RCom’s merger proposal with Aircel, dismissing operational creditors’ demand of a meeting to clarify on how the dues will be settled. However, the creditors – Ericsson, Bharti Infratel and GTL Infrastructure’s subsidiary Chennai Network Infrastructure Ltd (CNIL) - were planning for a repetition.
NCLT has fixed September 26 as the date for hearing Ericsson and October 11 for Rcom-Aircel and RCom-Brookfield matters. The tribunal had fixed September 13 to begin the final hearing on the merger.
Earlier, RCom was expecting to close the Rcom–Aircel deal by September-end. RCom and Aircel will have to get Department of Telecommunications (DoT) approval for the merger.
The RCom-Aircel merger was announced in September 2016 to create the country’s third-largest operator, under which RCom and Aircel’s Malaysia-based promoters Maxis Communications Bhd will hold 50 per cent each in a newly-created venture with equal representation on the board.
RCom’s overall debt, including the deferred spectrum payment liability, will be reduced by ₹20,000 crore and Aircel’s debt will reduce by ₹4,000 crore upon completion of the transaction.
Under the Brookfield deal, RCom will pay an upfront cash of ₹11,000 crore for 51 per cent interest in the tower business, which is the largest-ever FDI coming into India in the infrastructure sector. RCom will hold 49 per cent in the new entity, TowerCom Infrastructure Pvt Ltd.
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