RCom unit GCX files for bank­ruptcy

The Times of India (New Delhi edition) - - Times Global -

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.

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