China Development Bank files case against RCom under IBC Code

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. The telecom company 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 telecom company. 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. It said that CDB was “actively participating” in the joint lender forum that restructured RCom’s debt under the Reserve Bank of India’s strategic debt restructuring (SDR) rules. SDR allows banks to convert part of their loans into equity and take management control of a debtor. The telecom firm owes about ₹45,000 crore to lenders.

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