GCX insists it’s ‘not affected’ by Reliance Communications’ plight
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 stakeholders”.
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 action.
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 petitions.”
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 million.
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.