Reliance Communications Urges NCLT To Expedite Approval For Deals
Time is of essence, Reliance Communications argues at NCLT
Reliance Communications Ltd. urged the Mumbai bench of the National Company Law Tribunal to expedite its plea seeking approval for two deals crucial to repay debt after lenders granted it a seven-month moratorium.
Janak Dwarakadas, counsel for RCom, told the bench that objections by creditors to the deals could be dealt after the matter is admitted as hearing them before that would lead to multiplicity of proceedings. Lender China Development Bank and Swedish equipment maker Ericsson India are among the creditors which had objected saying they were not informed about the deals.
Dwarakadas said admitting the matter would in no way prejudice the interests of creditors as his client was not contesting the validity of the objections at this stage.
The Anil Ambani-led telecom operator hopes to pare its Rs 45,000 crore debt by more than half through the sale of its 51 percent stake in its tower arm and merging its wireless business with Aircel. Lenders had invoked strategic debt restructuring early last month after rating agencies downgraded the company’s short- and long-term debt to default for missing payments on non-convertible securities.
RCom’s counsel said a delay in hearing the application would not serve anyone’s interests as the company only had time till November, after which the account would become a non-performing asset.
China Development Bank has an exposure of close to Rs 9,000 crore to RCom while Ericsson had told NCLT that the company owes it Rs 1,000 crore. The bank contended that the telecom operator was bound by law to call a meeting of creditors to seek a go-ahead.
Darius Khambata, appearing for the Chinese lender, said what difference would it make if the objections were heard now as they would have to be heard in full at some stage. Dwarakadas responded by saying “hope springs eternal”. He was hopeful that the lender could come on board and withdraw its objections as early as Monday. Standard Chartered Bank has also withdrawn its objections, he said.