Anil Ambani files for bankruptcy protection

03 February, 2019, 18:31 | Author: Brooke Harris
  • Anil Ambani’s Reliance Communications to file for bankruptcy after failing to repay debt

Saddled with a mounting debt of Rs 46,000 crore and unable to sell its spectrum assets to elder brother Mukesh's Reliance Jio, Anil Ambani's debt-laden telecom venture Reliance Communications (RCom) made a decision to file for insolvency on Friday.

Reliance Communications (RCom) has chose to opt for insolvency proceedings after failing to sell assets to pay back lenders, the Anil Ambaniled telecom firm said on Friday.

Reliance Communications had planned to sell spectrum to Mukesh Ambani's Reliance Jio, but it did not materialise.

Company's board of directors reviewed the progress of its debt resolution plans; the strategic debt resolution progress was invoked on June 2, 2017.

The statement cited "unresolved challenges", pending legal issues at high courts, and the Supreme Court for the insolvency proceedings.

One of India's oldest telecom firms, Reliance Communications will file an application at the Mumbai bench of National Company Law Tribunal (NCLT) along with its units Reliance Telecom Ltd. and Reliance Infratel Ltd.

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The company had chalked out plans to sell assets for about Rs 25,000 crore and use it for clearing debt of around 40 lenders.

The NCLT, on the request of RCom, had granted it time to clear dues to avoid insolvency proceedings.

RCom said this course of action will be in the best interest of all stakeholders, ensuring comprehensive debt resolution in a final, transparent and time-bound manner within the prescribed 270 days.

Over twelve months, talks with forty lenders to reach a consensus has been impossible and has driven them to the bankruptcy court, the debt-laden telecom company said.

RCom also filed a contempt plea against the DoT for intentionally delaying the RCom-Jio spectrum deal. The company also assured to repay ₹230 crore to settle dues of minority shareholder in Reliance Infratel (including HSBC Daisy Investments) in December a year ago.

To complete the assets sale deal with RCom, Jio wanted an immunity from the telecom ministry that no dues prior to the deal, if any, will be imposed on it. DoT refused to grant the protection that led to an unofficial collapse of the big brother-small brother deal.

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