Shares of Reliance Communications plunged 48 percent on Monday morning as investors reacted to developments around its debt resolution plan. The company has decided to file for bankruptcy in a bid to resolve matters related to its debt.
The company that has over Rs 40,000 crore debt said this decision has been taken as their board has been unable to get a 100 percent approval of all 40 lenders on any matter.
“Despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway,” said RCom in a statement.
The company told exchanges that it will seek fast-track resolution through National Company Law Tribunal (NCLT) in Mumbai. They will implement the debt resolution plan through NCLT.
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RCom said it has been “impossible” to achieve an approval on the debt resolution matter despite having over 45 meetings with the lenders for over 12 months.
“Recurring legal challenges by Department of Telecommunications (DoT) for spectrum monetisation and continuing litigation by other parties support the decision to opt for the NCLT resolution track,” the company said.
The company also pointed to the pendency of numerous legal issues at high courts, Telecom Disputes Settlement & Appellate Tribunal (TDSAT) and the Supreme Court impeding progress at various stages, as a reason for going to NCLT.
Other Group companies of the Anil Ambani-led Reliance fell as well. Reliance Capital, Reliance Infrastructure and Reliance Naval, among others, fell 5-10 percent as well.
First Published on Feb 4, 2019 09:26 am