MUMBAI: Reliance Communications Ltd (RCom) on Friday said it was in advanced talks with Ericsson to resolve commercial issues, though reports indicated that the latter was uncertain about an out-of-court settlement.
“We confirm that RCom and Ericsson are at an advanced stage of discussions to expeditiously resolve commercial issues,” the company said in a disclosure with bourses.
It may be noted that Ericsson signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network, and is now seeking Rs 1,155 crore from the telecom carrier and two of its subsidiaries.
RCom shares plunged to Rs 14.10 on Friday on BSE from an intraday high of Rs 20.65, following reports that a settlement deal with Ericsson was unlikely. The mighty fall in the scrip comes after a near 100 per cent increase in the last two trading sessions, anticipating an out-of-court settlement with the Swedish telecom gear-maker.
Earlier this week, the bankruptcy court admitted a plea by Ericsson seeking insolvency resolution against the debt-ridden Anil Ambani-led RCom over unpaid service dues, potentially derailing the company’s plan to sell assets to larger rival Reliance Jio. Its debt stood at Rs 45,733 crore as on March 2017, and to raise capital and pay its dues, RCom, late last year, announced plans to sell most of its wireless assets to mobile carrier Reliance Jio Infocomm Ltd in a deal estimated to be worth about $3.8 billion.
According to RCom, a resolution would enable it to exit the bankruptcy court process. The company said it was also confident of expeditiously proceeding on its asset sale deal agreed with Jio and the overall debt resolution plan agreed with its creditor banks.
However, as per a Reuters report, RCom had approached Ericsson, but with a lack of clarity around payment of dues, a settlement currently looks uncertain, but Ericsson could withdraw its plea if an out-of-court understanding is reached.