Fresh insolvency plea filed against RCom; shares tumble 7%

Reuters Mumbai | Updated on January 09, 2018 Published on December 05, 2017

Fortuna Public Relations' insolvency pleas against RCom follow two separate petitions filed by China Development Bank and telecoms gearmaker Ericsson.

Fortuna Public Relations files petition against RCom, its unit Reliance Webstore over unpaid dues

Fortuna Public Relations Pvt Ltd has filed an insolvency petition against phone carrier Reliance Communications Ltd over a claim for unpaid dues of Rs 44 lakh, a lawyer representing the public relations firm said on Monday.

Reliance Communications shares tumbled as much as 7 per cent on the BSE to an intra-day low of Rs 10.73 on Tuesday. The company's shares opened at Rs 11.08 against Monday's close of Rs 11.54. At about 11.55 am, the stock was quoting at Rs 11.07, down Rs 0.47 or 4.07 per cent.

Separately, Fortuna has filed another insolvency petition against Reliance Webstore Ltd, a unit of the phone carrier, over unpaid dues of about Rs 41 lakh, said Darshan Mehta, a partner at Mumbai law firm Dhruve Liladhar & Co, which is representing Fortuna in the two cases.

The National Company Law Tribunal will hear the two cases next on December 19, Mehta said. [ Edit: Lenders’ ability to arrive at a quick resolution plan for Reliance Communications may prove a test case for the new Bankruptcy Code]

A spokesman for Reliance Communications declined to comment.

The insolvency pleas follow two separate insolvency petitions filed by China Development Bank and telecoms gearmaker Ericsson.

RCom, backed by businessman Anil Ambani, has struggled under a heavy debt load and has reported a string of losses during a price war in the highly competitive Indian telecoms market, prompting it to announce a partial shutdown of operations.

CDB, which sources have said is owed nearly $2 billion, last month filed a petition with the National Company Law Tribunal, making it the first financial creditor to drag RCom into insolvency proceedings.

Also read: Lenders to block insolvency suit against Reliance Communications

Analysis: RCom: Turbulence continues

Published on December 05, 2017
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