Anil Ambani-led Reliance Communications (RCom) could be staring at insolvency as the Supreme Court (SC) on Thursday declined to grant it two weeks extra time to clear the Rs 5.5 billion dues of Ericsson. The deadline for the said repayment ends December 15.
The refusal by the top court to grant more time to RCom revives fears of corporate insolvency proceedings against the company. The Rs 5.5-billion repayment agreement between RCom and Ericsson was reached in the National Company Law Appellate Tribunal (NCLAT). While asking RCom to clear the dues, the NCLAT had said Ericsson could revive the insolvency petition against the company if it failed to pay within the stipulated deadline.
RCom had then approached the apex court seeking an extension of the deadline, which was initially September 30 and later moved to December 15. The top court, however, had then made it clear that there would be no extensions beyond that. It had also directed RCom to pay Ericsson interest at the rate of 12 per cent per annum for missing the September 30 deadline.
Source: Business Standards, December 13, 2018