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Shares of Rcom up by 16% on resolution of legal dispute with Ericsson
TT Correspondent |  |  31 May 2018

Shares of Reliance Communications (Rcom) was up by 16% at Rs 20.30 a piece in the morning trading hours on the back of the telco settling its dispute with Ericsson.

The stock opened at Rs19.25 compared with the previous close of Rs17.50 on the BSE Thursday.

The settlement would help Anil Ambani-controlled telecom company to exit bankruptcy proceedings and sell assets to Reliance Jio Infocomm and Brookfield to repay lenders.

On Wednesday, Rcom agreed to pay Rs 550 crore to Ericsson to settle an eight-month legal dispute over dues.

Both parties presented the settlement details to the National Company Law Appellate Tribunal on Wednesday, after which the two-member bench chaired by Justice SJ Mukhopadhaya halted the insolvency proceedings ordered by the National Company Law Tribunal against RCom and its units Reliance Telecom and Reliance Infratel.

The Swedish telecom equipment maker had petitioned the NCLT to initiate bankruptcy proceedings in a bid to recover over Rs 1,000 crore from the companies. RCom, backed by lenders State Bank of India and China Development Bank, appealed against the order in the NCLAT.

The appellate tribunal directed the chairman/managing director of RCom to file an undertaking within a couple of days to pay Rs 550 crore by September 30.

The developments of the Wednesday, combined with a Rs 232 crore settlement reached Tuesday by Reliance Infratel with its minority shareholders including HSBC Daisy Investments, clear the path for RCom to sell its wireless assets to Jio to pare debt of Rs 46,000 crore.

RCom furthers aid it expects to complete the sale of its assets for a total of Rs 18,100 crore to Jio and Brookfield within the next few weeks, proceeds of which will go towards reducing debt by Rs 25,000 crore in the first phase of asset monetisation.

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31 May 2018(IST)  
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