RCom said that they were unable to complete approval from lenders on the debt resolution matter
Reliance Communications will file for voluntary bankruptcy in a bid to resolve matters related to its debt. The company that has over Rs 40,000 crore debt said this decision has been taken as their board has been unable to get a 100 percent approval of all 40 lenders on any matter.
"Despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway," said RCom in a statement.
The company told exchanges that it will seek fast-track resolution through National Company Law Tribunal (NCLT) in Mumbai. They will implement the debt resolution plan through NCLT.
RCom said it has been "impossible" to achieve an approval on the debt resolution matter despite having over 45 meetings with the lenders for over 12 months.
"Recurring legal challenges by Department of Telecommunications (DoT) for spectrum monetisation and continuing litigation by other parties support the decision to opt for the NCLT resolution track," the company said.
The company also pointed to the pendency of numerous legal issues at high courts, Telecom Disputes Settlement & Appellate Tribunal (TDSAT) and the Supreme Court impeding progress at various stages, as a reason for going to NCLT.
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.RCOM and only two of its subsidiaries, Reliance Telecom Ltd. and Reliance Infratel Ltd., will take appropriate steps shortly to implement this board decision. However, the company clarified that there will be no impact on the business and operations of its other subsidiaries, including GCX, Reliance IDC among others.