India’s National Company Law Tribunal has reportedly admitted three insolvency petitions filed by Ericsson against debt-laden Reliance Communications, which could threaten the operator’s plan of selling its wireless assets to Reliance Jio Infocomm.
The tribunal’s dedicated bankruptcy court has admitted the three petitions nearly eight months after Ericsson filed an NCLT plea seeking to recover 11.5 billion rupees ($169.5 million) in unpaid dues, the Economic Timesreported.
According to the report, Ericsson will now be asked to suggest the name of an interim resolution professional that will seek to settle the dispute.
But the litigation is expected to prevent RCom from completing the $3.84 billion sale of the operator’s wireless business to Reliance Jio Infocomm as part of its zero-write-off debt reduction plan.
While RCom’s bank lenders had agreed to the debt reduction plan and had been seeking to quash Ericsson’s bankruptcy petition on the grounds that it would result in a major loss for them, Ericsson has argued that it is not fair that lenders should be reimbursed for their losses while creditors are taken advantage of.
Ericsson has had 9,000 employees working on RCom and its subsidiaries and has not received RCom’s unpaid dues despite many promises and re-negotiations on payment schedules.