March 6, 2018 / 6:55 AM / 4 months ago

Reliance Communications launches appeal against order banning asset sales

MUMBAI (Reuters) - India’s Reliance Communications Ltd (RCom) said on Tuesday it had appealed at the Bombay High Court against a ruling by an arbitration tribunal that barred the indebted firm from selling assets without the tribunal’s permission.

FILE PHOTO: A logo of Reliance Group is seen at Reliance Center in Mumbai, India, December 26, 2017. REUTERS/Danish Siddiqui/File Photo

The tribunal’s ruling threatens RCom’s plans to reduce its $7 billion debt to Indian and foreign banks by selling assets such as airwaves, mobile masts and fibre optic investments.

RCom said it aimed to safeguard the interests of secured creditors by appealing against the tribunal’s interim order, which was issued on March 5 after Swedish telecom gearmaker Ericsson filed a case seeking payment of unpaid dues.

The tribunal’s interim ruling, a copy of which was seen by Reuters, did not say when final decision would be issued.

Ericsson, which signed a seven-year deal in 2014 to operate and manage RCom’s nationwide network, has said it is owed 11.55 billion rupees ($177.82 million) by RCom and two of its units.

The Indian unit of the Swedish firm had launched a separate case at India’s National Company Law Tribunal in September seeking to push RCom and its units into insolvency proceedings.

RCom Chairman Anil Ambani aims to cut his firm’s debt by selling most of its wireless assets to Reliance Jio Infocomm Ltd in a deal sources said was worth about $3.8 billion. RCom had said it aimed to close the deal March.

Jio is the telecoms firm owned by Anil Ambani’s elder brother Mukesh Ambani, India’s richest man.

Jio did not respond to requests for comment on Tuesday. Ericsson declined to comment on the case.

China Development Bank (CDB), RCom’s biggest foreign lender and which had sought to push RCom into insolvency, withdrew its petition after the firm announced its debt reduction plans.

($1 = 65.0550 Indian rupees)

Reporting by Sankalp Phartiyal and Krishna V Kurup; Editing by Subhranshu Sahu and Edmund Blair

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