Anil Ambani resigns as Reliance Communications Director

Anil Ambani. (PTI photo)

Anil Ambani, along with four other directors of embattled telco, Reliance Communications, which has been battling a case for solvency off late, have tendered resignation from the company -- hinting at impending liquidation of the company.

The people who tendered resignation include its chairman Anil D Ambani, independent Chhaya Virani, and Ryna Karani, and non-executive, non-independent directors Manjari Kacker, Suresh Rangachar.

With this gamut of resignation, the company's board is left with only five directors now -- trimming it by 50%. The remaining directors include former SBI Chairman A K Purwar.

The resignation of Manikantan V and appointment of D Vishwanath as Executive Director and Chief Financial Officer has been put up to the COC for their approval, the company said.

The sources in know and analysts on Dalal Street expect only one scenario for the company from here: the board would be taken over by the debt-laden company's creditors, followed up with the liquidation of the company.

"The resignations in a sense confirms the market view that it is the end of the road for the company and that we should expect it to continue as a going concern," said Amit Tandon Founder & MD at proxy advisory firm Institutional Investor Advisory Services India Limited (IiAS).

The current financial liabilities of the company, in the past six months, have surged by a whopping 49.7% to Rs 79,604 crore from Rs 53,188 crore.

On Friday, the company had reported a loss of whopping Rs 30,142 crore -- an astounding 10-fold jump from Rs 358 crore. The loss was primarily on the back of huge provisioning towards AGR charges, which has severely impacted the bottom line of other telcos -- Airtel and Vodafone-Idea as well.

In case the company goes for the liquidation, which is the most likely scenario according to most of the analysts that DH spoke, the company's shareholders won't get anything, as the company has capitalised its losses. As of date, the company's net worth stands at a negative Rs 35,955 crore, surging nine-folds from the beginning of the current financial year.

Also, the creditors in the best possible scenario will have to take a haircut worth 26.5%, as the total assets of the company stand at Rs 58,544 crore.

In February 2019, the company, that was founded in 2003, filed for bankruptcy as it was unable to sell assets to repay its debt.

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