RCom offers to settle Ericsson matter out of NCLT, shares surge

Reliance Communications is believed to have offered to settle its eight-month long legal battle with Swedish telecom gear maker Ericsson outside the insolvency and bankruptcy proceedings, people familiar with the matter said, boosting the telecom operator’s shares over 44% in intraday trade.

According to the people, both parties are holding talks to resolve the issue, but no formal offer has been made.

The people added that Ericsson has sought for more assurance, asking lender SBI to pay up in case the Anil Ambani-owned company doesn’t.

Lawyers from both sides are believed to have approached the National Company Law Tribunal (NCLT) Mumbai bench Thursday morning, asking for the appointment of the interim resolution professional (IRP) be deferred till 2 30 pm today.

An order from the National Company Law Tribunal (NCLT) Mumbai bench directing insolvency proceedings to begin against the Anil Ambani owned carrier is also expected today.

Any settlement could possibly help RCom to move ahead with the sale of its wireless assets to Reliance Jio for Rs 18,000 crore and pare debt of Rs 46,000 crore.

RCom’s scrip was up 44.1% on Thursday at Rs 15.20 on BSE on afternoon trade.

Both companies have not issued any official statements, and didn’t immediately respond to emails seeking comment.

The Mumbai bench of the NCLT on Tuesday had admitted three petitions filed against the telco and its subsidiaries by Swedish telecom equipment maker Ericsson under the Insolvency and Bankruptcy Code.

The development had jeopardized RCom deal to sell its wireless assets to Jio. RCom is the second operator, after Aircel, to be hauled through bankruptcy proceedings.

Ericsson, which had signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network, is trying to recover ₹1,150 crore in dues.

RCom shut wireless operations in late 2017, after a merger attempt with Aircel fell through. It signed a deal with Reliance Jio in late December to sell its spectrum, towers, fibre network and switching nodes for about ₹18,000 crore to repay lenders.