In three separate but similar orders, the National Company Law Tribunal (NCLT) on Friday appointed Pardeep Kumar Sethi for RCom, Manish D Kaneria for Reliance Infratel and Mitali Shah for Reliance Telecom as IRPs with immediate effect to seek ways to revive the companies and repay creditors.
“The Registry is hereby directed to communicate this order to the operational creditor and the corporate debtors,” the two-judge bench headed by BSV Prakash Kumar, said in one of the orders.
With the IRPs taking charge, RCom can no longer sell assets on its own. It had signed a deal to sell its spectrum, towers, fibre and switching nodes to Reliance Jio for some Rs18,000 crore to pare debt. RCom, under a debt of Rs 46,000 crore, was dragged into insolvency proceedings after the NCLT admitted three petitions filed by Ericsson against the telco and its two units.
The Swedish equipment maker, represented by senior lawyer Anil Kher during the proceedings, is claiming dues of more than Rs1,000 crore.
According to NCLT’s order admitting Ericsson’s plea against the telco, insolvency proceedings against RCom were to have started from May 15. The IRP would now have 270 days to come up with a solution to bring RCom back, failing which the company could face liquidation. RCom became the second telco after Aircel to be admitted to bankruptcy proceedings.
The appointments of the IRPs came on a day RCom confirmed it is in “advanced” talks with Ericsson to resolve their dispute. But people familiar with the matter at Ericsson said there is no settlement yet as the telco was yet to get back on the gear maker’s demand that lead lender State Bank of India to give a bank guarantee equal to the settlement amount.
“We confirm that RCOM and Ericsson are at an advanced stage of discussions to expeditiously resolve commercial issues. This will enable Reliance Communications to exit the NCLT process,” the telco said in a notice to the stock exchanges.
ET had reported Thursday that the latest settlement amount being discussed was around Rs700 to Rs800 crore, after Ericsson rejected an initial offer of Rs400-500 crore. But Ericsson wants SBI to come up with a bank guarantee equal to the decided amount.
“RCom is confident to expeditiously proceed with its monetisation plan with Reliance Jio and overall resolution plan with the lenders, keeping in mind the interests of all stakeholders,” the telco said.
The company’s stock rose nearly 25% in early trade on Friday on hopes of a settlement, but closed down 7.3% at Rs15.35 on the BSE after it became clear an agreement is still some time away and that IRPs were taking over the company.
If a pact is reached, the two parties would need to approach a higher court to exit the insolvency process against RCom.
A settlement outside the insolvency process, if allowed, may help RCom to move ahead with a plan to sell its wireless assets and real estate and repay more than 30 lenders.
