Chinese bank withdraws insolvency filing against RCom
05 January 2018 | James Pearce
Reliance Communications has been boosted by reports that the China Development Bank has withdrawn its insolvency filing against the embattled company.
The Chinese bank is the indebted telecoms operator’s biggest lender, holding RCom debt of around $2 billion along with two other Chinese banks. It filed a petition in November seeking insolvency proceedings against RCom due to overdue payments.
Reports from the National Company Law Tribunal cited a lawyer who said that CDB had filed to withdraw the petition, with the tribunal allowing this plea to proceed.
The withdrawal comes after RCom – which owns Global Cloud Exchange - and owner Anil Ambani unveiled a major debt-reduction plan which includes offloading its mobile assets to rival Reliance Jio, owned by Ambani’s brother Mukesh Ambani.
The deal struck between the Ambani brothers will see RCom offload its spectrum, towers and other consumer telecoms assets to Jio for around $3.7 billion, but hold on to other units including GCX. The deal is expected to close by March, with the funds earmarked to pay down its debts. An earlier plan to merge with rival mobile operator Aircel floundered in October 2017.
The assets that Reliance Jio has bought include 122.4MHz of 4G spectrum in the 800, 900, 1,800 and 2,100MHz bands; over 43,000 towers, which RCom had been trying to sell independently; 178,000 route kilometres of fibre; and 248 media convergence nodes.
It leaves RCom facing insolvency proceedings from two other companies. Swedish vendor Ericsson announced proceedings last year over unpaid dues, whilst PR firm Fortuna is also reportedly seeking insolvency.
To hear about GCX's bigger investment plans, check out an interview with GCX CEO and RCom co-CEO Bill Barney from the December/January issue of Capacity magazine. <<<CLICK HERE>>>Follow @jamespearce87