Info-tech

Relief for RCom: China Development Bank withdraws insolvency petition

Rajesh Kurup Mumbai | Updated on January 08, 2018 Published on January 05, 2018

The move is a fallout of RJio’s acquisition of most of RCom’s wireless assets

In a major relief to debt-ridden Reliance Communications (RCom), its biggest foreign lender, China Development Bank (CDB), has withdrawn a petition seeking insolvency of the company.

The petition, which was withdrawn on Friday, had been filed before the Mumbai Bench of the National Company Law Tribunal (NCLT).

NCLT had listed the matter for hearing today. The tribunal dismissed the Insolvency and Bankruptcy Code applications, as withdrawn by CDB, RCom said in a regulatory filing. Further details of the petition were not disclosed.

RCom owes CDB and other Chinese banks about $2 billion, and the lender had filed the petition in November, citing a large amount of overdue loan principal and interest payments.

The move came following the deal between RCom and Reliance Jio (RJio) in December, wherein the latter acquired most of the wireless assets of the debt-ridden company.

RCom shares rose 2.10 per cent to ₹34.05 on the BSE today.

On December 28, Mukesh Ambani-led RJio acquired the wireless assets of RCom, which included more than 43,000 towers, 1.78-lakh route km of optical fibre cable network, 122.4 MHz of spectrum in the 800, 900, 1800 and 2100 MHz bands, and 248 Media Convergence Nodes.

The monetisation of RCom’s assets was mandated by its lenders, who appointed SBI Capital Markets to run the process. It was supervised by an independent group of distinguished industry experts.

The transaction was expected to be closed in a phased manner between January and March 2018. While the companies did not disclose the deal size, banking sources had pegged it at ₹23,000 crore.

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Published on January 05, 2018
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