MUMBAI: Reliance Communications (RCom) on Wednesday insisted it was negotiating a settlement with China Development Bank, one of its largest creditors, even as the Chinese government banker sought to club its insolvency petition against the Anil Ambani-led company with other petitions seeking the same.
“We have received an email from petitioner…we are in talks and may not have to go through all this,” Navroz Seervai, a senior counsel representing RCom, told the National Company Law Tribunal (NCLT). Senior counsel Darius Khambata, who represented China Development Bank (CDB), however, told the tribunal that his client has given no “such instruction” on any discussion between the two firms.
CDB is looking to recover $1.78 billion, or about Rs 11,460 crore, of dues the debt-laden telecom operator battling multiple insolvency cases. The Chinese bank, accounting for 37.11% of RCom’s total secured debt, moved NCLT in November against both RCom and its subsidiary Reliance Telecom since the former was the guarantor and the latter the principal borrower. NCLT will take a call on December 18 if the insolvency petition should be admitted. According to global media agencies, two other Chinese banks — Industrial and Commercial Bank of China and Export-Import Bank of China — plan to back CDB.
On Wednesday, counsels representing both sides said they will move National Company Law Appellate Tribunal (NCLAT) to club RCom and Reliance Telecom cases and be heard under one forum. Reliance Telecom was RCom’s arm operating in five circles in northeast India, with free allocated spectrum for GSM service.
Its operations were seriously stripped down after it failed to renew airwaves in the 900 MHz band. CDB’s petition is expected to hurt the strategic debt restructuring (SDR) of RCom that some Indian banks had undertaken in September.
In October, after its merger with Aircel fell through, RCom applied for a fresh plan to its lenders, under which banks could convert some debt and take 51% stake in the operator. Banks could then raise funds by selling the telco’s towers and spectrum to potential buyers including Reliance Jio, and monetise real estate assets.