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Reliance Communications Appeals Against Order Banning Asset Sales

An arbitration tribunal had barred the indebted firm from selling assets without its permission earlier.

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Reliance Communications Appeals Against Order Banning Asset Sales

Reliance Communications has launched an appeal against the order banning asset sales

Highlights

  1. RComm has a Rs 45,412 crore debt to Indian and foreign banks
  2. Plans to raise money through selling assets such as airwaves
  3. The tribunal's ruling threatens RComm's plans to reduce debt
MUMBAI: India's Reliance Communications Ltd (RComm) said on Tuesday it had appealed at the Bombay High Court against a ruling by an arbitration tribunal that barred the indebted firm from selling assets without the tribunal's permission.

The tribunal's ruling threatens RComm's plans to reduce its $7 billion debt to Indian and foreign banks by selling assets such as airwaves, mobile masts and fibre optic investments.

RComm said it aimed to safeguard the interests of secured creditors by appealing against the tribunal's interim order, which was issued on March 5 after Swedish telecom gearmaker Ericsson filed a case seeking payment of unpaid dues.

The tribunal's interim ruling, a copy of which was seen by Reuters, did not say when final decision would be issued.

Ericsson, which signed a seven-year deal in 2014 to operate and manage RComm's nationwide network, has said it is owed 11.55 billion rupees ($177.82 million) by RComm and two of its units.

The Indian unit of the Swedish firm had launched a separate case at India's National Company Law Tribunal in September seeking to push RComm and its units into insolvency proceedings.

RComm Chairman Anil Ambani aims to cut his firm's debt by selling most of its wireless assets to Reliance Jio Infocomm Ltd in a deal sources said was worth about $3.8 billion. RComm had said it aimed to close the deal March.

Jio is the telecoms firm owned by Anil Ambani's elder brother Mukesh Ambani, India's richest man.

Jio did not respond to requests for comment on Tuesday. Ericsson declined to comment on the case.

China Development Bank (CDB), RCom's biggest foreign lender and which had sought to push RCom into insolvency, withdrew its petition after the firm announced its debt reduction plans.

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© Thomson Reuters 2018


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