The tribunal's ruling is likely to jeopardise the company's deal with Reliance Jio Infocomm, which will nearly halve its debt.
Reliance Communications Ltd (RCom) will challenge National Company Law Tribunal's (NCLT) move to admit Swedish gear maker Ericsson's petition if it jeopardises the resolution plan approved by a clutch of domestic lenders to settle dues of close to Rs 45,000 crore.
The battle is for the repayment of Rs 1,155 crore of dues, which Ericsson alleges that RCom owes it for managing and operating the former's telecom network in a seven-year agreement that both the companies had inked in 2014. Last September, the Swedish company had filed a petition in the NCLT's Mumbai bench seeking liquidation of the telecom operator to recover the amount.
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. The company is set to report earning for the quarter ended March on May 19.
Sistema Shyam Teleservices Ltd on Wednesday offloaded over 2.76 crore shares of debt-ridden RCom, lowering its holding to 3.44%.
RCom can appeal the verdict with a tribunal in New Delhi. The issue for bankers is that under the Insolvency and Bankruptcy Code an insolvency resolution needs to be completed in nine months, after which the company has to be liquidated. The latter scenario would result in what could be one of India's biggest bankruptcies and conclude the downfall of what was once the country's second-largest phone operator. The rule is aimed at blocking back-door entry by delinquent owners.
Run by wealthy businessman Anil Ambani, RCom has said it plans to reduce its debt by selling assets such as airwaves, mobile masts and fibre optic investments.