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RCom shares, bonds weaken after Ericsson's insolvency petition

Reuters  |  MUMBAI 

(Reuters) - in Communications fell as much as 2.3 percent in early trading on Thursday, a day after the Indian arm of filed a seeking to drag the debt-laden telecom firm into insolvency due to unpaid dues.

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 11.55 billion rupees ($180 million) from the company and two of its subsidiaries.

Communications, widely known as RCom, reported its third quarterly loss in a row last month. It is trying to find ways to cut debt after lenders gave it a reprieve on loan repayments until the end of 2017.

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 Ambani.

Communications' bonds also fell in early trading on Thursday, with its 6.5 percent bonds due 2020 indicating at 55/60 cents on the dollar, versus earlier indicating at 57/62 on the dollar.

"This seems like the first salvo has been fired but is unlikely to push to bankruptcy," said a Hong Kong-based trader.

is protecting its own interests and this could open the door for negotiation later, "but I do expect some selling particularly from private banking bondholders," the trader said.

(Reporting by Umesh Desai and Sankalp Phartiyal; Editing by Gopakumar Warrier)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, September 14 2017. 10:13 IST