RCom says majority of lenders oppose China bank’s insolvency petition

Reliance Communications, the embattled telecom service provider from the Anil Ambani stable, said a majority of its lenders opposed the move by China Development Bank to move ahead with insolvency proceedings on the company.

“At a Committee of Financial Creditors Meeting on 29 November 2017, a majority of Reliance Communications’ lenders, foreign and Indian, aggregating 31, decided to oppose China Development Bank’s (CDB) Insolvency Petition against RCOM before the National Company Law Tribunal, Mumbai,” it said.

It added that the lenders decided to appoint Delhi-based law firm J Sagar Associates as their Legal counsel to oppose the said CDB petition at the admission stage itself.

The move could potentially bolster RCom’s standing in opposing the liquidation proceedings started by the Chinese bank.

The statement also indicates that most lenders to RCom believe in the company’s promise to repay much of what it owes them by selling its assets.

However, there have also been reports that some of the lenders do not support the plan put forward by the company.

A month ago, RCom announced a debt repayment plan involving raising Rs 27,000 crore through asset sales.

The plan also envisages the company making repayments of up to ₹17,000 crore through monetisation of assets and another ₹10,000 crore through sale and development of real estate space.

The plan also involves lenders converting about Rs 7,000 cr of their debt into shares at Rs 24.72 per share. The company has total debt of around 45,000 cr.

However, the company’s current stock price is only Rs 12.60, and some lenders are reportedly not keen on the valuation proposed by the company.

On the other hand, if the lenders succeed in pressing for liquidation, they would be able to take control of the company, sell it off and keep what they get.