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Insolvency case: Ericsson moves NCLT against RCom to get Rs 1,154 cr dues

Ericsson signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide network

Reuters  |  Mumbai 

The exterior of an Ericsson building is seen in Stockholm. (File photo: Reuters)
The exterior of an Ericsson building is seen in Stockholm. (File photo: Reuters)

Ericsson's Indian subsidiary has filed insolvency petitions against Communications and two of its to recover unpaid dues, the Indian mobile operator said in a stock exchange filing on Wednesday.

The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Communications' nationwide network, is seeking a total of Rs1,155 crore ($180 million) from the three companies, the filing said.

Communications said it planned to challenge the insolvency petitions. The filing said the case would go before the National Company Law Tribunal, the designated court for cases in India, on Sept. 26.

"has done this as a last resort in order to resolve an issue regarding debt that owes to for services provided under a contract. As the legal process is ongoing, we don't have any further comments at this point," the Swedish company said.

The petitions come as the Indian phone company controlled by billionaire Anil races against time to seal deals to sell a stake in its tower assets to Canada's Brookfield and to merge its mobile services business with rival Aircel.

Communications reported its third quarterly loss in a row last month and is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017.

The Brookfield and Aircel deals are expected to reduce its debt burden by Rs 25,000 crore. said at the time of the loan reprieve that he expected to complete the deals by September.

The company's losses are, in part, a result of competition from free voice and cut-price data plans offered by Jio Infocomm, the telecom start-up backed by Ambani's elder brother and India's richest man Mukesh

is aiming to recover Rs 491 crore from Communications, 5.35 billion from Infratel and Rs 129 crore from Telecom, the filing said.

Communications shares closed 4 per cent lower on Wednesday before the filing was released, after local media reports said had filed an insolvency plea.

India last year revamped its laws to help cut a record $150 billion in impaired bank loans. The rules allow financial as well as business creditors to trigger proceedings against a company which has defaulted on payments.

First Published: Thu, September 14 2017. 09:34 IST