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Reliance Communications' settlement with Ericsson over dues unlikely for now: sources

Reuters  |  MUMBAI 

By Sankalp Phartiyal

MUMBAI (Reuters) - Embattled telecoms firm is in talks with to reach a settlement outside of bankruptcy court over unpaid service dues, but a deal with the Swedish gearmaker looks unlikely for now, two sources said.

India's bankruptcy court earlier this week admitted an insolvency filed by against debt-laden RCom, as the company is widely known, potentially derailing the Indian telecoms firm's plans to sell assets to larger rival to cut debt.

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 agrees to deposit outstanding dues before withdraws its

Shares in rose almost 30 percent on Friday on of talks with Ericsson.

RCom did not immediately respond to a request for comment, while Ericsson said it does not comment on speculation.

Ericsson, which signed a seven-year deal in 2014 to operate and manage RCom's nationwide telecoms network, is seeking 11.55 billion rupees ($170 million) from the company and two of its subsidiaries.

RCom, controlled by Anil Ambani, late last year announced plans to sell most of its to in a deal sources said was worth about $3.8 billion. Jio, the telecoms venture of Reliance Industries, is controlled by India's richest man and Anil's elder brother,

With debt totalling 457.33 billion rupees ($6.73 billion) at end-March 2017, RCom is the most-leveraged of all listed telecoms carriers in

The order from (NCLT) allowing Ericsson's insolvency 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

A for RCom previously told that the company would appeal the NCLT's decision at an appellate tribunal.

(Reporting by Sankalp Phartiyal; Editing by and Himani Sarkar)

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

First Published: Fri, May 18 2018. 13:02 IST