RCom unit GCX files for bankruptcy
Aunit of Reliance Communications (RCom), Anil Ambani’s distressed telecom firm, has filed for bankruptcy protection. GCX, which owns the world’s largest private undersea cable system, is the latest company owned by the tycoon to stumble.
The former billionaire’s RCom itself fell back into bankruptcy earlier this year. The move by subsidiary GCX comes after it missed payment on its $350million of 7% bonds that matured on August 1. Ambani has been waging a war on debt, and the Reliance Group has said that it planned to raise about Rs 21,700 crore ($3.1 billion) by selling assets from roads to radio stations in a bid to cut borrowings.
Reliance Naval & Engineering, another firm controlled by Ambani, said recently it is facing an acute cash-flow crunch after orders dried up amid efforts to restructure a pile of debt.
GCX and other firms said that they plan to implement a pre-packaged plan that could include a debt-to-equity swap and also concurrently a marketing process to solicit bids for the sale of their business, according to a court filing. Holders of about 76% of senior notes have committed to the plan, the filing also said.
GCX said in July that it had reached a forbearance pact with holders that provided additional time to discuss options related to the maturity of its bonds.
GCX along with other associates filed for Chapter 11 bankruptcy protection at the Delaware court, according to a court filing.