Anil Ambani's RCom files for bankruptcy after failing to repay debts of Rs 46,000 cr

The Anil Ambani-led Reliance Communication has made it clear that it will very soon move the National Company Law Tribunal (NCLT) for insolvency proceedings.

Reliance Communication Chairman Anil Ambani. (Image: PTI)

New Delhi: The Anil Ambani-led Reliance Communication has made it clear that it will very soon move the National Company Law Tribunal (NCLT) for insolvency proceedings seeking bankruptcy protection as the company has failed to pay back its debt summing to the tune of up to Rs 46,000 crore. “RCom board of directors decides upon implementation of debt resolution plans through NCLT framework,” the company said in a statement. RCom conducted a board of directors meetings on Friday in order to review the progress of the company’s debt settlement plans post the invocation of strategic debt resolution on June 2, 2017. Insolvency is a situation where the liabilities of a person or firm exceed its assets. In practice, however, insolvency is the situation where an entity cannot raise enough cash to meet its obligations or to pay debts as they become due for payment. Things went rough for Anil Ambani when the company’s approach to sell spectrum to his brother Mukesh Ambani-led Reliance Jio did not materialise. Reliance Jio declined to take over any past liability of RCom for which the Department of Telecom (DoT) may raise demand in future. Swedish telecom firm Ericsson had earlier filed a petition before the NCLT to invoke insolvency proceedings against RCom. The Board noted that despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway, the statement said. Accordingly, the Board decided that the company will seek fast track resolution through NCLT in Mumbai. With this move, the company believes that course of action will be in the best interests of all stakeholders, ensuring comprehensive debt resolution in a final, transparent and time-bound manner within the prescribed timeline of 270 days. “The unfortunate outcome is attributable to the unresolved challenges, including lack of 100 per cent approvals and consensus, as mandated by the RBI’s February 2018 circular, on all important issues among over 40 lenders despite the passage of 12 months and over 45 meetings,” said the company statement. Adding to the trouble, the pendency of numerous legal issues at high courts, TDSAT and Supreme Court started impeding RCom's progress at various stages. The company had chalked out plans to sell assets for about Rs 25,000 crore and use it for clearing debt of around 40 lenders. RCom was expecting to realise Rs 975 crore from sale of spectrum to Jio which it promised to use paying dues of Rs 550 crore to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel.