31 May 2018
| Alan Burkitt-Gray
Indian operator Reliance Communications (RCom) has exited insolvency after agreeing to pay Ericsson only 55% of the $150 million it owed.
At the same time India’s bankruptcy court has
agreed that RCom can complete a pair of deals to raise the
equivalent of $1.7 billion by selling off its assets.
The sale will not include Global Cloud Xchange (GCX), which has been ring-fenced from the insolvency
and which is in negotiation with three unnamed
companies to acquire it – but the decision will
clear the way for GCX to consider those bids.
RCom will sell its real estate in New Delhi and Chennai to the
Canadian company Brookfield Asset Management for $118
At the same time it will sell its spectrum, towers and Indian
fibre and switches to unrelated rival Reliance Jio, a company
that was started by Mukesh Ambani, the brother of
RCom’s boss Anil Ambani. RCom has already shut
down its mobile telecoms business after facing huge competitive pressure from Reliance Jio
and other companies in the market.
Two years ago RCom was poised to sell a majority stake in its
tower assets to Brookfield but that deal was dropped because RCom failed
to merge with rival operators.
RCom has also settled its disputes with the minority
shareholders in Reliance Infratel, the subsidiary that owns its
RCom expects to complete all its asset sales within the next