RCom in talks with Ericsson over settlement

21 May 2018
00:00
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Daily News

India's Reliance Communications (RCom) is reportedly negotiating with Ericsson to settle their financial dispute outside of bankruptcy court, but a settlement appears unlikely at this stage.

Ericsson filed three insolvency petitions against Ericsson last week over unpaid dues, putting up a roadblock to Reliance's plans to sell its wireless assets to Reliance Jio Infocomm to reduce its debt.

Now RCom has approached Ericsson seeking to negotiate an out-of-court agreement, the Economic Timesreported, citing two sources.

But a settlement currently looks uncertain due to a lack of clarity around repayment terms, the report states.

A settlement would be possible if RCom agrees to deposit its outstanding dues in exchange for Ericsson withdrawing its petitions.

Ericsson is reportedly seeking 11.55 billion rupees ($170 million) in unpaid dues from RCom and two of its subsidiaries. The company signed a seven-year agreement in 2014 to operate and manage RCom's nationwide network, including 150,000km of fiber as well as mobile, wireline and enterprise networks.

If a settlement does not eventuate and RCom is unsuccessful in its appeal against the National Company Law Tribunal's decision to allow Ericsson's insolvency petitions, an RCom sale or liquidation would be overseen by a court-appointed administrator.

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