RCom slumps after NCLT admits Ericsson's plea

Reliance Communications fell 18.47% to Rs 10.15 at 12:00 IST on BSE after an insolvency tribunal reportedly ordered bankruptcy proceedings against the telecom company on a petition filed by Ericsson.

Meanwhile, the S&P BSE Sensex was down 174.35 points, or 0.49% to 35,369.59.

On the BSE, 1.32 crore shares were traded in the counter so far compared with average daily volumes of 81.63 lakh shares in the past two weeks. The stock had hit a high of Rs 11.95 and a low of Rs 10 so far during the day. The stock hit a 52-week high of Rs 41.77 on 29 December 2017. The stock hit a record low of Rs 9.60 on 15 November 2017.

 

According to reports, the Mumbai bench of the National Company Law Tribunal on Tuesday, 15 May 2018, admitted three petitions filed against Reliance Communications (RCom) and its subsidiaries by Swedish telecom equipment maker Ericsson under the Insolvency and Bankruptcy Code. The latest development could affect RCom's deal to pare debt by selling its wireless assets to Reliance Jio Infocomm, media reports suggested.

Reports added that the full order in the matter is expected to be released on Wednesday, 16 May 2018.

Meanwhile, RCom clarified after market hours yesterday, 15 May 2018, that the company and two of its subsidiaries Reliance Telecom and Reliance Infratel, await the detailed orders of the National Company Law Tribunal (NCLT), Mumbai, allowing the Ericsson application for admitting the companies to debt resolution under IBC. The companies will decide the next course of action after studying the orders.

On a consolidated basis, RCom reported net loss of Rs 113 crore in Q3 December 2017 as against net loss of Rs 488 crore in Q3 December 2016. Net sales declined 31.70% to Rs 1144 crore in Q3 December 2017 over Q3 December 2016.

RCom has established a pan-India, next-generation, digital network that is capable of supporting best-of-class services spanning the entire communications value chain.

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