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China Development Bank withdraws insolvency petition against RCom

CDB had filed the petition in November seeking insolvency proceedings against RCom, saying a large amount of loan principal and interest payments was overdue

Reuters  |  Mumbai 

Anil Ambani, RCom
Anil Ambani, Chairman of Reliance Communication | Photo: Kamlesh Pednekar

Development (CDB), the biggest foreign lender to India's Communications Ltd (RCom), on Friday withdrew a petition seeking to drag the indebted telecoms carrier into insolvency.

A lawyer for told the National Company Law Tribunal that the Chinese had filed to withdraw the petition. The tribunal allowed CDB's plea to go forward.

CDB, which is owed around $2 billion along with two other Chinese banks, had filed the petition in November seeking insolvency proceedings against RCom, saying a large amount of loan principal and interest payments was overdue.

After RCom's debt-reduction plan, including an asset sale to Jio Infocomm Ltd, was announced last week, told Reuters that it was in talks with

Details of the terms of a possible settlement between the Chinese and were not immediately known.

By 0847 GMT, shares were trading 4.2 percent higher in a Mumbai market that was up 0.4 percent.

Last week, signed a deal to sell most of its wireless assets to Jio in a deal people familiar with the matter said was worth nearly 240 billion rupees ($3.8 billion), subject to final adjustments at the time the transaction closes.

has said it will use proceeds from the deal, expected to close by March, to repay part of the $7 billion it owes to Indian and foreign banks.

As part of an overall debt-reduction plan, Chairman Anil Ambani said would shift 100 billion rupees of debt to a special purpose vehicle housing its real estate assets, including a corporate park in a Mumbai suburb.

still faces two other insolvency proceedings - one by the Indian unit of Swedish telecom equipment maker Ericsson and the other by public relations firm Fortuna - over unpaid dues.

has struggled under heavy debt and reported a string of losses during a price war, triggered by new entrant Jio which is controlled by Anil's elder brother and India's richest man Mukesh Ambani. That prompted to reduce operations by shutting down its wireless business.

As it exits the wireless telecommunications segment, it will be left with a division housing its undersea cable business and internet data centres.

The firm is also looking for an equity injection from global strategic partners for further debt reduction and is in talks to sell a stake in the scaled-down business, said last week.

First Published: Fri, January 05 2018. 15:23 IST
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