CDB withdraws insolvency case against RCom

CDB withdraws insolvency case against RCom

China Development Bank (CDB), the biggest foreign lender to Reliance Communications (RCom), on Friday withdrew a petition seeking to drag the indebted telecom carrier into insolvency.

The move followed a new debt reduction plan outlined by RCom last week, including asset sales.

While details of a possible settlement between the Chinese bank and RCom were not immediately known, the lender has told the National Company Law Tribunal that it reserves the right to file the insolvency application again if RCom's planned asset sales do not go through by March, said a lawyer on the case. CDB, which is owed around $2 billion along with two other Chinese banks, had filed the petition in November seeking insolvency proceedings against RCom, saying a large amount of loan principal and interest payments was overdue.

After RCom's debt-reduction plan, including an asset sale to Reliance Jio Infocomm, was announced last week, CDB said that it was in talks with RCom.

RCom last Thursday announced a deal to sell most of its wireless assets to Jio in a deal sources said was worth nearly $3.8 billion, subject to final adjustments at the time the transaction closes. RCom has said it will use proceeds from the deal, expected to close by March, to repay part of the $7 billion it owes to Indian and foreign banks. As part of an overall debt-reduction plan, RCom Chairman Anil Ambani said the company would shift Rs 10,000 crore of debt to an SPV housing its real estate assets, including a corporate park in a Mumbai suburb.

Liked the story?

  • 0

    Happy
  • 0

    Amused
  • 0

    Sad
  • 0

    Frustrated
  • 0

    Angry