RCom out of woods? Shares zoom 9% as arm Infratel settles with minority shareholders; Ericsson next

Shares of Reliance Communications zoomed by more than 9% on Tuesday, after the Anil Ambani-run company announced that its subsidiary Reliance Infratel reached a settlement with its minority investors, and the company also reportedly agreed to pay up Rs 500 crore to Ericsson. “Reliance Infratel, a subsidiary of RCOM has informed the Hon’ble NCLAT today that an amicable settlement has been arrived at between it and minority investors holding 4.26% equity in the Company, and consent terms will be filed shortly,” Rcom said in a stock exchange filing. Rcom shares rallied to an intra-day high of Rs 16.8.

According to a ET Now report, NCLAT will hear Rcom’s appeal against insolvency process tomorrow. Notably, the rally in the shares comes for the second straight day, with the stock zoomikng more than 11% intra-day yesterday, on the announcement that National Company Law Appellate Tribunal (NCLAT) fixed the appeals against the National Company Law Tribunal (NCLT) orders for hearing on May 29, 2018.

In the statement, the firm said that this settlement with the minority investors paves the way for vacation of the stay granted by the NCLT on the sale of RITL’s tower and fibre assets. Further, this will also enable the company to proceed with asset monetisation of Rs. 8,000 crore as soon as the Company exits the debt resolution process under NCLT, for which its appeal, supported by all its lenders, is fixed for hearing today i.e. Tuesday, May 29, 2018 before the Hon’ble NCLAT, Rcom said in the statement.

Yesterday the company had announced that all banks and financial institutions of the above 3 companies have unanimously decided to oppose the NCLT debt resolution process. “Major lenders, including China Development Bank, State Bank of India and Standard Chartered Bank, have been formally impleaded to the appeal proceedings before the Hon’ble NCLAT,” Rcom said in the statement.

Earlier, Swedish telecom major Ericsson had dragged RCom and its subsidiaries Reliance Telecom and Reliance Infratel to the bankruptcy court over non-payment of more than Rs 1,000 crore in dues. The three companies had then appealed the NCLT’s order in the National Company Law Appellate Tribunal (NCLAT).

Reliance Communications (RCOM)