China Development Bank (CDB) on Friday withdrew its insolvency petition against Reliance Communications Ltd (RCom), following the Anil Ambani-led firm's announcement of a Rs39,000-crore asset monetisation plan to pare its debt last month.
However, Swedish gear maker Ericsson continued its battle against the telecom firm to recover dues. Ericsson, as operational creditor or a vendor who is owed by a client, is seeking to recover Rs1,150 crore from RCom, while CDB, a secured lender accounting for 37 per cent of RCom's total secured debt, has dues of Rs11,460 crore.
Senior counsel Darius Khambatta, who represented China Development Bank and Ericssson, said that since RCom's plans to sell wireless and real estate assets in order to generate funds to repay lenders is up to March 2018, CDB is "accommodating" for the benefit of all creditors.
The lawyer sought withdrawal of CDB's case rather than dismissal to ensure that the Chinese lender can approach the court at a later date in case the asset monetization plan does not succeed. ''All this is dependent on the asset monetization plan, which will take place by March,'' he said. The lender also withdrew its case against Reliance Telecom Ltd, a subsidiary of RCom.
The beleaguered telecom firm owes around $2 billion to Chinese banks including CDB. The total debt of RCom as on 30 October 2017 stood at Rs45,000 crore, which it plans to bring down to Rs6,000 crore of ''serviceable'' debt.
While Khambatta didn't spell out the specifics of any out-of-court settlement with RCom, The Economic Times had earlier reported CDB and other Chinese lenders were in advanced talks to take up 70 per cent in the development of Dhirubhai Ambani Knowledge City.
Arguing for Ericsson, Khambatta told the bench comprising Justices B S V Prakash Kumar and V Nallasenapathy that RCom "has miserably failed to make payments" and listed out the multiple exchanges between Ericsson with RCom and its affiliates on dues.''
The case will be heard by the National Company Law Tribunal (NCLT) on 18 January. The Swedish network equipment provider has filed a case against RCom and two of its subsidiaries, Reliance Telecom and Reliance Infratel Ltd.
According to Ericsson, RCom and its subsidiaries together owe it Rs1,154 crore. RCom, however, has raised certain objections with respect to discrepancies in the amount outstanding.
In the last week of December, Ambani announced that RCom has exited strategic debt restructuring, which was invoked by its lenders in June last year. He said that the company has arrived at a debt reduction plan which includes sale of its fibre, spectrum and tower network along with development of its real estate assets and equity injection by a global strategic partner.
Ambani also said that the lenders have received final binding bids and that the bidding process has been vetted by a committee chaired by S S Mundra, former deputy governor at the Reserve Bank of India. The panel had been appointed by the joint lenders forum.