RCom to lose its undersea cable unit as clouds hang over debt revamp

Indian telecom operator Reliance Communications Ltd. will lose control of its undersea cable unit GCX Ltd. after a Delaware Court approved a creditor-supported Chapter 11 plan for the subsidiary, in a setback to its own closely-watched bankruptcy process.

The plan that got the nod this week will grant ownership of GCX to its own creditors in exchange for a debt write down of $150 million, according to a GCX statement and filings. The administrator of Reliance Communications had objected to the plan, arguing that the unit isn’t fundamentally insolvent and that it couldn’t function without its parent, a major client