China’s CDB files insolvency case against Rcom

MUMBAI: China Development Bank (CDB) has become the first lender to file a case against debtridden Reliance Communications Ltd under the Insolvency and Bankruptcy Code, said two people familiar with the matter.

The bank filed the case before the Mumbai bench of the National Company Law Tribunal (NCLT) on November 24, and law firm Trilegal is advising the Chinese lender, the two said on condition of anonymity. Rcom owes close to$2 billion in syndicated loans to CDB.

CDB joins Rcom’s operational creditors—ericsson India Ltd and Manipal Tech Ltd—which have filed bankruptcy petitions against the telco. Another of its vendors, Tech Mahindra Ltd, too had filed a petition before withdrawing it citing settlement talks, The Economic Times reported on November 2.

“The Company has not been served any notice of the application filed by China Development Bank with NCLT, as reported in the media,” said Rcom in a notice to stock exchanges. CDB, it said, was “actively participating” in the joint lenders forum that restructured Rcom’s debt under the strategic debt restructuring (SDR) rules. SDR lets banks convert part of their loans into equity and take control of a debtor. Rcom’s total debt stood at ₹44,345 crore as of March 31.

“The Company continues to remain engaged with all Lenders including the China Development Bank and is confident and committed to a full resolution with the support of all the Lenders,” Rcom said in its statement.

A Trilegal spokesperson did not respond to calls and an email seeking comment. CDB could not be reached for comment.