Reliance Communications’ Tower Sale, Merger With Aircel Face Creditor Hurdle

Creditors objected to Reliance Communications Ltd.’s plan to merge its wireless business with Aircel and sale of tower assets saying they were not informed about the deals, which are crucial for the company’s efforts to pare its debt.

Lender China Development Bank and vendor Ericsson India approached the National Company Law Tribunal on Wednesday, among others. The Chinese lender has an exposure of close to Rs 9,000 crore while the Swedish equipment maker said the company owes it Rs 1,000 crore. Other creditors that raised objections include the Hong Kong Shanghai Banking Corporation and Chennai Network Infrastructure. They said not being notified about the potential deals affected their business interests.

Banks recently gave Reliance Communications seven months to repay loans after rating agencies downgraded the telecom operator’s debt to default. It is looking to reduce its Rs 45,733-crore gross debt by more than half by September through the planned merger with Aircel and the sale of 51 percent of its towers, Chairman Anil Ambani said at a press conference earlier this month.

Also Read: Reliance Communications Approaches Three Chinese Banks For Loan Waiver

Senior Counsel Janak Dwarakadas, appearing for RCom, told the Mumbai bench of the NCLT that the creditors will be sent notices and details of the two deals. The bench directed the creditors to file any objections they might have on either or both the deals within 10 days. RCom will then have another 10 days to file its replies. The NCLT will hear all objections on July 27.