Anil Ambani’s Now-Bankrupt Reliance Communications Owes Over Rs 50,000 Crores to Banks
Rcom is the first Anil Ambani group company to be officially declared bankrupt.
On May 9, Anil Ambani’s Reliance Communications (RCom) has become the first Anil Ambani group company to be officially declared bankrupt. Rcom owes over Rs 50,000 crore to banks.
PTI reported that the National Company Law Tribunal (NCLT) superseded RCom’s board and appointed a new resolution professional (RP) to run it and also allow the State Bank of India-led consortium of 31 banks to form a committee of creditors.
The NCLT on Thursday reportedly allowed RCom to exclude the 357 days that were spent in litigation and admitted the company for insolvency. RCom had cited the stays it had on the insolvency process by the appellate tribunal and the Supreme Court to seek the 357 days exclusion.
As per reports, a bench comprising VP Singh and R Duraisamy said the matter should proceed in a manner of law and in view of the guidelines the tribunal grants the exclusion of time for Reliance Infratel and Reliance Telecom along with RCom.
Earlier, the company was reportedly forced to stop operations after it was in trouble for years. The company’s efforts to avoid bankruptcy were spoiled by legal and government delays in approval to sell its spectrum to Reliance Jio. The company also could not keep several public promises to pay back lenders by monetising real estate and spectrum assets.
Earlier last month the company’s chairman Anil Ambani managed to avoid contempt of the Supreme Court and a possible jail term, after his elder brother Mukesh Ambani bailed him out at the last minute. Mukesh gave Anil over Rs 480 crore to pay back vendor Ericsson. The latter was the first operational creditor to drag RCom to the NCLT in September 2017 for non-payment of over Rs 1,500 crore dues. In the end, a settlement of Rs 550 crore was agreed upon between the two companies.
China Development Bank had also dragged RCom to the NCLT. The latter had borrowed over USD 1 billion. The matter was settled after a portion of RCom headquarters at Dhirubhai Ambani Knowledge City (DAKC) in Navi Mumbai was given to the bank.
On May 3, SBI reportedly held a meeting to shortlist an RP. RCom’s committee of creditors needs to approve a new RP after the NCLT starts the insolvency process.
On May 7 the Mumbai bench had directed the existing RP to file a progress report by May 30, when the matter is scheduled to be heard next, reports say.
(With PTI inputs)