The Swedish firm signed a seven-year deal in 2014 to operate and manage Reliance Communications’ nationwide network.
Ericson India on Wednesday filed an insolvency petitions against Anil Ambani's Reliance Communications and two of its subsidiaries, Reliance Infratel and Reliance Telecom, over total unpaid dues of Rs 1,150 crore.
The Swedish firm signed a seven-year deal in 2014 to operate and manage Reliance Communications’ nationwide network, in its filing said that the case would go before the National Company Law Tribunal (NCLT), the designated court for bankruptcy cases in India, on 26 September.
"Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract, " the company said.
If the petition is accepted by NCLT, it could disrupt the merger process between RCom and Aircel, which could destroy Anil Ambani's plan to pare Reliance Communications debt by about 60%.
Earlier, Ericson had objected to the merger, seeking a creditors’ meeting. However, the Mumbai bench of the NCLT had admitted the merger petition in August and will hear it on October 11.
RCom said in a regulatory filing on Wednesday that it “intends to challenge the said petitions”.
Debt-laden Reliance Communications earlier this year said that its lenders had agreed to a strategic restructuring plan under which it will get a 7-month standstill to service loans amounting to Rs 45,000 crore.
In a damage control mode following credit rating downgrades, RCom chairman Anil Ambani then held a press conference to announce that the debt burden will be reduced to Rs 20,000 crore with two deals by September, before the December deadline given by the lenders at a meeting with them earlier in the day. Besides, he said, RCom will consider strategic sale of global business to further pare debt.
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