Rcom offers ₹500 cr to settle Ericsson row
NEWDELHI: The National Company Law Appellate Tribunal (NCLAT) on Tuesday asked Ericsson India Pvt. Ltd to consider an offer of ₹500 crore made by Reliance Communication Ltd (Rcom) to settle a dispute over non-payment of dues. NCLAT will next hear the matter on 30 May.
The directive came when a two-judge NCLAT bench headed by justice SJ Mukhopadhyay was hearing an appeal by Rcom against a May 15 order of the Mumbai bench of the National Company Law Tribunal (NCLT) initiating insolvency proceedings against it on a plea by Ericsson for recovery of unpaid dues of over ₹1,150 crore.
Ericsson had signed a sevenyear deal in 2014 with Reliance Communication to operate and manage its nationwide telecom network. After non-payment of dues since 2016, Ericsson moved NCLT under the Insolvency and Bankruptcy Code against Reliance Communication and its two subsidiaries—reliance Infratel and Reliance Telecom—in September 2017. The other parties before NCLAT include the lenders to Reliance Communica- tion—china Development Bank, State Bank of India (SBI) and Standard Chartered Bank.
Arun Kathpalia, appearing for Ericsson, told the court that the principal due amount of over ₹900 crore has now inflated to ₹1,600 crore.post insolvency proceedings, efforts by Reliance Communication to reach an out-of-court settlement with Ericsson have reportedly not worked out.
The admission kick-starts a time-bound 180-day insolvency resolution process for Reliance Communication, which can be extended by 90 days.
The initiation of insolvency proceedings also puts a question mark on the fate of Reliance Communication’s ₹25,000 crore deal with Reliance Jio for sale of its assets mortgaged with different banks, as a debt resolution plan.