22 May 2018
| Alan Burkitt-Gray
Subsea network Global Cloud Xchange (GCX) has said bankruptcy proceedings against Reliance Communications (RCom) have ‘no impact’ on its business operations.
In a forthright statement GCX, which is part of the same
group as RCom, said a process started by India’s National Company Law
Tribunal (NCLT) will not affect it or the Reliance Internet
Data Center (RIDC) or its Indian enterprise businesses.
"The day-to-day operations and business of the company will not
be impacted," said GCX. A senior GCX executive told
Capacity separately that the unit was ring-fenced from
the troubled group.
The NCLT has appointed three separate interim resolution
professionals, one each to run RCom, Reliance Telecom and the
tower subsidiary Reliance Infratel. The group is heavily
indebted to Ericsson, which has applied for the companies to be
put into bankruptcy.
GCX said that RCom will have "an appropriate resolution plan"
to take GCX plus the data centre and enterprise operations
"successfully out of the proceedings for the benefit of all
But GCX has not yet said what that plan is. The presence of the
NCLT’s interim resolution professionals would
normally prevent sales of any associated businesses.
RCom’s plan to sell its spectrum, towers,
switching centres and fibre network to unrelated rival Reliance
Jio has already been stalled by the NCLT’s
GCX said: "GCX’s subsea connectivity and managed
services business and RIDC’s data centre
businesses are completely out of scope of the debt resolution
It added: "GCX, RIDC and India Enterprise businesses will
continue its management and operations on a business-as-usual
basis. The customers, employees, vendors and other stakeholders
of GCX, RIDC and India Enterprise business will continue to
have uninterrupted and stable operations."
Meanwhile RCom has appealed against the NCLT’s
decision to put in managers, on the grounds that it is in
negotiations with Ericsson over the debt. Reports in the last
few days suggest that they are discussing a settlement of
$100-$150 million after Ericsson rejected an offer of $60-$70
They are also discussing the role of the State Bank of India,
one of RCom’s lenders. RCom’s debts
total around $6.75 billion.
Global Cloud Xchange,