Ericsson files case of insolvency against Reliance Communications
Indian subsidiary of Ericsson has filed petition of insolvency in opposition to Reliance Communications and 2 of its firms to recover not paid dues, the Indian mobile operator claimed to the media this week in a stock exchange filing.
The telecoms equipment producer of Sweden, which inked a 7-year contract in 2014 to manage and operate nationwide network of Reliance Communications, is looking for a total of 11.55 Billion Rupees (almost $180 Million) from the 3 companies, claimed the filing. Reliance Communications claimed that it aimed to challenge the petitions of insolvency. The filing claimed that the Ericsson case might go before the (NCLT) National Company Law Tribunal, the elected court for cases of bankruptcy in the country, in next month.
“Ericsson has done this as a last option in order to solve a issue related to debt that Reliance needs to pay to Ericsson for provided services below a contract. As the lawful process is in progress, we do not have any additional comments at this stage,” the Swedish firm claimed to the media. The petitions came as the Indian phone firm handled by billionaire Anil Ambani battles against time to lock deals to trade a share to Canada’s Brookfield in its tower assets and to combine its business of mobile services with rival Aircel.
Reliance Communications posted its 3rd quarterly loss consecutively last month and is making an attempt to find methods to slash its money owing after creditors gave it a official pardon on repayments of loan until the end this year. The Aircel and Brookfield deals are anticipated to lower its burden money owing by almost 250 Billion Rupees. Ambani claimed during the loan reprieve that he anticipated completing the contracts by next month.
The losses of the company are, in fact, a result of rivalry from cut-price data plans and free voice provided by Reliance Jio Infocomm, the telecom company led by elder brother of Ambani and richest man in India Mukesh Ambani. Ericsson is planning to recuperate 5.35 Billion Rupees from Reliance Infratel, 4.91 Billion Rupees from Reliance Communications, and 1.29 Billion Rupees from Reliance Telecom, claimed the filing.