Ericsson urges SC not to quash RCom insolvency case till its dues are paid

By: |
New Delhi | Published: August 3, 2018 2:58:03 AM

Opposing Reliance Communications’ (RCom) plea for quashing of the insolvency proceedings initiated against it and its two subsidiaries, telecom equipment manufacturer Ericsson India on Thursday urged the Supreme Court not to do so till the former paid Rs 500 crore as mutually agreed between them.

Ericsson also requested the apex court not to grant RCom permission to sell its mobile business assets.

Opposing Reliance Communications’ (RCom) plea for quashing of the insolvency proceedings initiated against it and its two subsidiaries, telecom equipment manufacturer Ericsson India on Thursday urged the Supreme Court not to do so till the former paid Rs 500 crore as mutually agreed between them.

Ericsson also requested the apex court not to grant RCom permission to sell its mobile business assets.
The closure of the insolvency proceedings initiated by the Mumbai bench of the NCLT is essential for the Rs 25,000-crore deal signed between the Ambani brothers to sell RCom’s mobile business assets including spectrum, mobile towers and optical fibre network to Reliance Jio. It was on May 15 that the NCLT had admitted the insolvency petition filed by Ericsson in lieu of recovering pending dues of Rs 1,150 crore.

However, RCom and its affiliate group companies — Reliance Infratel and Reliance Telecom — amicably settled the dispute with the Swedish company by offering Rs 500 crore before the tribunal in May.

RCom senior counsel P Chidambaram told a bench led by Justice RF Nariman that the firm was willing to give an undertakings that it will honour its dues to all 38 financial creditors besides paying Ericsson its Rs 500 crore if the sale is allowed to go through.

Reliance requested the court to give effect to the mutual settlement so as to ensure certainty of the sale process and its irreversibility and immunity from any further challenges.

“The mere stay without terminating the CIRP would lead the sale process of the assets of the corporate debtors being carried at the behest of the secured creditors in a state of uncertainty,” the Reliance firms stated in their plea. According to them, the continuation of the CIRP will result in a much lesser value from the sale process than that determined through a fair and transparent bidding process run by the lenders. “The assets of the corporate debtors are losing value exponentially on a daily basis. This is likely to cause loss to the secured creditors (14 PSU banks) for whose benefit the sale process is being carried,” it stated.

The bench posted the matter for further hearing on Friday.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Ongoing enquiry against Chanda Kochhar may lead to more scrutiny, says ICICI Bank
2Regulator FSSAI gives food delivery companies 2 weeks to delist unlicensed restaurants
3Trai contests ‘muted spectrum demand’ view; says 5G, LTE will drive hunger for radiowaves