India's bankruptcy court earlier this week admitted an insolvency plea filed by Ericsson against debt-laden RCom, as the company is widely known, potentially derailing the Indian telecoms firm's plans to sell assets to larger rival Reliance Jio to cut debt.
RCom has approached Ericsson, but with a lack of clarity around payment of dues "a settlement currently looks uncertain," one of the sources familiar with the matter said.
Both sources, who asked not to be named as the discussions are private, said a settlement could be reached if RCom agrees to deposit outstanding dues before Ericsson withdraws its plea.
RCom did not immediately respond to a request for comment, while Ericsson said it does not comment on speculation.
RCom, controlled by businessman Anil Ambani, late last year announced plans to sell most of its wireless assets to mobile carrier Reliance Jio in a deal sources said was worth about Rs 3.8 billion. Jio, the telecoms venture of Reliance Industries, is controlled by India's richest man and Anil's elder brother, Mukesh Ambani.
With debt totalling Rs 457.33 billion ($6.73 billion) at end-March 2017, RCom is the most-leveraged of all listed telecoms carriers in India.
The order from India's National Company Law Tribunal (NCLT) allowing Ericsson's insolvency plea against RCOM means RCom's sale, or liquidation in case a deal does not work out within a maximum of nine months, will be overseen by a court appointed administrator.
A lawyer for RCom previously told Reuters that the company would appeal the NCLT's decision at an appellate tribunal.