RCom clarifies on reports of China bank filing insolvency case; stock tanks

Reliance Communications tanked 6.37% to Rs 12.50 at 9:19 IST on BSE after the company issued a clarification on media reports that China development bank is filing insolvency case against the company.

Meanwhile, the S&P BSE Sensex was down 34.14 points or 0.1% at 33,690.30.

On the BSE, 9.73 lakh shares were traded on the counter so far as against the average daily volumes of 43.18 lakh shares in the past one quarter. The stock had hit a high of Rs 13 and a low of Rs 12.20 so far during the day. The stock had hit a 52-week high of Rs 41 on 6 April 2017 and a record low of Rs 9.60 on 15 November 2017.

 

Reliance Communications (RCom) issued a clarification to the stock exchanges after market hours yesterday, 27 November 2017, with regard to media news titled "China development bank files insolvency case against Reliance communications". RCom said that the company has not been served any notice of the application filed by China Development Bank with NCLT, as reported in the media.

RCom is engaged through the joint lenders forum (JLF) with all its lenders for a successful resolution of the strategic debt restructuring (SDR) process. The China Development Bank has also been actively participating in the JLF. RCom said it is therefore, surprised by the untimely and premature action of the China Development Bank of filing an application at NCLT. RCom added that it continues to remain engaged with all lenders including the China Development Bank and is confident and committed to a full resolution with the support of all the lenders.

Separately, RCom said it has entered into a binding share purchase agreement with Pantel Technologies and Veecon Media & Television for sale of its subsidiary Reliance BIG TV (RBTV), engaged in the business of direct-to-home (DTH) services across India.

Pursuant to this transaction, the buyers will acquire the entire shareholding of RBTV with business on an "as-in, where is" basis, along with existing trade and contingent liabilities. The transaction will help to reduce the liability of unsecured creditors, benefitting all stakeholders, including lenders and shareholders of RCom. The transaction is in consonance with RCom's stated objective to focus on B2B businesses of the new RCom, the company said in a statement.

On a consolidated basis, RCom reported a net loss of Rs 2709 crore in Q2 September 2017, compared with net profit of Rs 62 crore in Q2 September 2016. Net sales declined 48.7% to Rs 2615 crore in Q2 September 2017 over Q2 September 2016.