Troubles are mounting for Anil Ambani as China Development Bank (CDB) has filed an insolvency petition against Reliance Communications to recover its dues.
RCom reportedly owes close to Rs 9,000 crore to CDB, which is learnt to have filed the case on November 24.
Already, Swedish telecom equipment operator Ericsson and Manipal Technologies have filed insolvency cases against the telecom operator, which is shutting down most of its services by the end of November, after its deal to merge the telecom business with rival Aircel collapsed two months ago.
RCom said since it was already in talks with all the lenders to resolve the strategic debt restructuring, it was surprised by CDB's move.
“The company is engaged through the JLF (joint lenders forum) with all its lenders for a successful resolution of the SDR process. The China Development Bank has also been actively participating in the JLF. The company is therefore, surprised by the untimely and premature action of the China Development Bank of filing an application at NCLT,” RCom said in a notice to stock exchanges.
However, the company has not been served any notice of the application filed by China Development Bank with NCLT, it added.
RCom has close to Rs 45,000 crore in debts. The company was banking on two deals—merging its telecom business with Aircel and selling a major stake in its telecom tower assets to Canada's Brookfield Infrastructure—to reduce the debt by more than half.
But, the deal with Aircel lapsed and since that deal fell through, Brookfield also backed out of the deal to buy the telecom tower assets.
“Our agreement to acquire the previously announced $200 million investment in a portfolio of over 40,000 towers from Reliance Telecom was conditional on, among other standard conditions, the merger of Reliance Communications with Aircel. The merger will not proceed and therefore our transaction as previously announced will not proceed either,” Brookfield said in an SEC (US Securities and Exchange Commission) filing on November 3.
Since then, RCom has submitted a zero-loan write off plan to lenders. As a part of the plan, debt of Rs 7,000 crore is proposed to be converted into 51 per cent of RCom’s equity, as per the SDR guidelines. The company’s shareholders have already approved plans to issue equity shares to lenders by converting loans.
However, with RCom shares plunging in recent months, it is uncertain if the lenders will be ready to convert the debt into equity at the present price.
Since October 3, when the Rcom - Aircel deal failure was announced, the stock has plunged near 22 per cent. On Monday, RCom shares closed down 1.1 per cent at Rs 13.35.
RCom has said it will monetise lucrative real estate across cities, including Navi Mumbai, where the Dhirubhai Ambani Knowledge City is housed and also sell its existing telecom spectrum to repay debt.
Earlier this month, it entered into a binding memorandum of understanding to sell its subsidiary Reliance Big TV Ltd, which was offering direct to home (DTH) services across the country, to privately owned Veecon Media and Television for an undisclosed amount.
“The company continues to remain engaged with all lenders including the China Development Bank and is confident and committed to a full resolution with the support of all the lenders,” said RCom on Monday.
