Jio Deal: Setback for RCom as Ericsson takes a U-turn

 

 

Ericsson on Thursday withdrew from the Reliance Communication settlement deal, an agreement under which the latter had agreed to pay Rs 500 crore to the former to resolve issues related to unpaid dues.

The Supreme Court will hear Ericsson's objection on Friday.

Ericsson signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecoms network and it has not been paid for the service. The Swedish company was seeking Rs 1600 crore from RCom and two of its subsidiaries and had opposed the sale of RCom's assets to Jio.

RCom, controlled by wealthy businessman Anil Ambani, is the most-leveraged of all listed telecoms carriers in India. The company had a debt totaling Rs 45,700 crore at end-March 2017.

Last September, the telecom gear maker had filed a petition in the NCLT Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that RCom owes it.

NCLT proceedings can potentially delay RCom's plans to sell assets to lighten its debt load.

RCom owes around Rs 45,000 crore to as many as 31 domestic and international banks, including over Rs 10,000 crore to a Chinese lender. Due to mounting losses, the company began to wind down its mobile operations from last November.