Co surprised by the move, says engaged with with all its lenders for a successful resolution of the strategic debt restructuring process
A consortium of Chinese banks have filed an insolvency case against the debt-ridden Reliance Communications (RCom) in the National Company Law Tribunal (NCLT) at Mumbai seeking telecom firm's debt resolution under the Insolvency and Bankruptcy Code (IBC).
As the domestic lenders drag their feet on getting back their money extended to RCom, the foreign lenders have been more fleet-footed to recover their money.
The consortium of Chinese banks joins operational creditors Ericsson India and Manipal Tech, which have already filed a petition seeking resolution under the new IBC. If either of the petitions get admitted, all other lenders – including domestic banks – will get dragged into the insolvency proceedings as the NCLT will mandate the creation of a committee of creditors.
The domestic lenders had invoked strategic debt restructuring (SDR) in June this year, and the standstill clause for repayments extends to December 28.
In response to BSE query that sought an explanation on the development, a Reliance Communications spokesperson said, "The company has not been served any notice of the application filed by China Development Bank with NCLT, as reported in the media". However, in the interest of all stakeholders, the spokesperson said: "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."
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, the spokesperson added.
Chinese banks, according to sources, named Alvarez & Marsal (A&M) India as the resolution professional in the matter.
The move by Chinese lenders follows the failure of resolution efforts in the past, which included a tower sale to Brookfield and merging Aircel with itself to reduce the debt. The lenders include China Development Bank, Industrial & Commercial Bank of China and The Export-Import Bank of China. The company has a debt of Rs 45,000 crore, half of which is accounted for by Chinese lenders.
Earlier RCom has said that it will jointly work with the foreign lenders to jointly develop the 125-acre campus at DAKC in Navi Mumbai. For the domestic lenders the company is planning to raise Rs 17,000 crore.
RCom, in an interaction with DNA Money on November 5, had said that the company has given the banks a definitive timeline to conclude all monetisation initiatives between December 2017 and March 2018.
"We will receive indicative offers for all our assets by the end of November. Binding agreements will be signed by December 2017. By the first quarter of the next calendar year, we should be able to finish off this monetisation crore and pay off all secured lenders," RCom had said.
DISTRESS CALL
- The company has a debt of Rs 45,000 crore, half of which is accounted for by Chinese lenders
- RCom has said that it will jointly work with the foreign lenders to jointly develop its DAKC campus in Navi Mumbai
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In response to BSE query that sought an explanation on the development, a Reliance Communications spokesperson said, "The company has not been served any notice of the application filed by China Development Bank with NCLT, as reported in the media". However, in the interest of all stakeholders, the spokesperson said: "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."
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