RCom shares dip on insolvency plea

Marco Green
May 17, 2018

Last September, the Swedish firm had filed a petition in the NCLT's Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that Reliance Communications owes it.

According to the report, Ericsson will now be asked to suggest the name of an interim resolution professional that will seek to settle the dispute.

The court order sets back RCom's planned sale of airwaves, towers and fibre assets to Reliance Jio, the phone company owned by Ambani's older brother Mukesh, who is India's richest man.

Ericsson has had 9,000 employees working on RCom and its subsidiaries and has not received RCom's unpaid dues despite many promises and re-negotiations on payment schedules.

After falling as much as 18 percent in the previous trading session, shares of Reliance Communications rose 8.5 percent in the early trade on Thursday as investors hoped for a positive outcome from the company's likely appeal to NCLAT (National Company Law Appellate Tribunal) against NCLT (National Company Law Tribunal) order.

The company has postponed to 19 May its board meeting scheduled to be held on Tuesday to approve audited financial results for the quarter and year ended 31 March. On NSE, shares of the company slumped 15.72 per cent to close the day at Rs 10.45. The stock is down 68.85% during the last one year. The rule is aimed at blocking back-door entry by delinquent owners.

RCom is the second-largest listed company by assets in Anil Ambani's business empire.

On Wednesday, HSBC Daisy Investment petition opposing the sale of the tower assets of Reliance Infratel the tower subsidiary of RCom came up for hearing in the Supreme Court but was adjourned for May 17.

Weakness was also seen in other group stocks, with Reliance Naval and Engineering falling by 6.96 per cent, Reliance Nippon Life Asset Management 2.46 per cent, Reliance Power 0.45 per cent and Reliance Infrastructure 0.45 per cent on BSE.

Other reports by Click Lancashire

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