Ericsson rejects 2 settlement proposals offered by RCom

MUMBAI | NEW DELHI: Negotiations between Reliance Communications and Ericsson for a settlement have hit a stalemate with the Swedish telecom equipment maker rejecting two proposals of the Anil Ambani owned operator.

According to people familiar with the development, RCom had offered either a payment guarantee by an Anil Ambani-controlled company or an undertaking by the directors of the telco and its two units — Reliance Infratel and Reliance Telecom — that the Swedish equipment maker would be paid within 15 days if it withdraws its insolvency petition.

Ericsson has dragged RCom to bankruptcy court over non-payment of more than 1,000 crore of dues and National Company Law Tribunal (NCLT) has admitted its petition last week.

“This has been going on for eight months. On what basis will Ericsson accept further promises of timelines. One cannot withdraw the petition unless payments are made. Also, no details were disclosed about the Ambani-owned company,” said one of the people directly aware of the latest developments.

Ericsson, when contacted, declined to comment on ‘market speculation’. RCom had not responded to ET’s queries sent late Friday evening at the time of going to press.

RCom said last week that the talks with Ericsson to “expeditiously resolve commercial issues” were “at an advanced stage.” It added that it was confident of proceeding with its monetisation plan with Jio and an overall resolution plans with its lenders, keeping in mind the interests of all stakeholders.

According to sources, the latest offers were tabled because the lenders of RCom and its units refused to provide any payment guarantee to operational creditors. A conference call between the two companies involving their finance and legal teams took place on Friday late noon to discuss the proposals.

Meanwhile, the NCLT appointed interim resolution professionals (IRPs) for Reliance Infratel and Reliance Telecom, the subsidiaries of RCom, have called for creditors to submit details of dues that both companies owe to them.

In separate notices issued by Mitali Shah, the IRP for Reliance Telecom Limited, and MD Kaneria, the IRP for Reliance Infratel, financial as well as operational creditors have been told that the last date for submitting the claims is June 1. ET has seen copies of the notices which were issued on May 21.

Sources said that the IRPs would have about a month from the day that the order was announced — May 15 — to set up a committee of creditors (CoC) to which the they will present solutions such as sale of assets, to get the company back on track.

The IRPs have set a time frame of 180 days, till November 11to finish the process.

Ericcson’s move to take RCom to NCLT has put on hold the telco’s plan to sell assets to pay back its debtors. The telco planned to pare debt of Rs 46,000 crore by selling assets including towers, fibre network and spectrum to Reliance Jio for 18,000 crore.