ET: Ericsson won’t accept settlement from RCom without SC direction

16 February 2019: Swedish telecom gear maker Ericsson will not accept any settlement offer by Reliance Communications (RCom), unless directed by the Supreme Court, people familiar with the matter said. The stance comes post the debt-laden telco’s offer to make payments using income tax refunds to the company. 

“RCom lawyers had said they are willing to give Rs 129 crore, which is an income tax refund, and another forthcoming refund of Rs 134 crore. This was over and above Rs 118 crore that has been deposited with the Supreme Court registry earlier,” said Anil Kher, senior advocate representing Ericsson, on the option given by RCom in the top court this week. 

“However, Ericsson did not respond to this suggestion and left it to the decision of the court,” the senior counsel said. 

People aware of developments say Rs 381 crore is way lower than the settlement term of Rs 550 crore and therefore Ericsson is unlikely to accept it. The operational creditor said it had settled for Rs 550 crore as settlement when total dues were over Rs 1,500 crore. 

RCom did not respond to ET’s queries. Ericsson declined to comment. 

The Supreme Court has reserved orders on Ericsson’s contempt petitions against RCom and its chairman Anil Ambani on the operator’s failure to comply with its assurance in court to pay arrears of Rs 550 crore to its Swedish equipment supplier. This will be the second time in recent weeks that the operator under a debt of over Rs 40,000 crore has given Ericsson a settlement option. 

The Swedish company however rejected the offer, saying it needs to be paid first, and that the matter needs to be settled through the top court. Ambani appeared in the top court twice this week during the contempt case hearing. 

The battle between the Department of Telecommunications and RCom over one-time spectrum-related charges (OTSC) of Rs 2,000 crore was heard by the top court on Friday. The court refused to stay an earlier order by Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which had directed the DoT to return bank guarantees worth Rs 2,000 crore that were given as OTSC by RCom. 

The Supreme Court has asked DoT to reply within three weeks and no directive was given for the renewal of the said bank guarantees expiring in third week of March this year, bringing some relief to the telco. The top court has listed the matter for hearing after four weeks.

The Economic Times reported

BS:Kwality Ltd seeks more time to file results

16 February 2019: Dairy firm Kwality Ltd, which is undergoing corporate insolvency resolution process (CIRP), Saturday sought more time to declare its financial results.

It said after an order of the National Company Law Tribunal (NCLT), the powers of the board of directors of the company stood suspended and are being exercised by the interim resolution professional appointed by the NCLT.

“Though the company is sincerely endeavouring for completion of audit on priority basis, but the company would need additional time to declare and publish financial results beyond the stipulated due date and will be able to do within 30 days,” Kwality Ltd said in a BSE filing.

It said that at the time of initiation of CIRP, the audit work for the quarter ended December 31, 2018, although commenced, was progressing at a slow pace on account of high employee attrition in the past few months and is yet to conclude.

Business Standard reported

ET: SBI approaches big 4 auditors to appoint resolution professional for RCom – The Economic Times

16 February 2019: State Bank of India (SBI), one of the major lenders to Anil Ambani’s Reliance Communications (RCom), has approached some of the Big Four audit firms and consultants to identify and select a resolution professional (RP) to manage insolvency proceedings of the telecom company.

EY and a previously appointed resolution professional for RCom are among the firms interviewed by the state-run lender, according to people in the know.

SBI is considering initiating an independent application to take RCom to the National Company Law Tribunal though the debt-ridden company had informed stock exchanges on February 4 that it had decided to submit itself to NCLT as it was unable to pay its debts. The lender also has the option of waiting for RCom to initiate bankruptcy proceedings on its own and then recommending an RP of its choice once the committee of creditors is convened, according to sources. RCom owes banks close to Rs 40,000 crore.

NCLT Had Approved RBSA as RP 
“It is a policy of the bank not to comment upon individual accounts and its treatment,” said an SBI spokesperson in response to emailed queries.

Swedish telecom equipment maker Ericsson had dragged RCom to NCLT in May last year on the grounds that the telecom firm had not paid Rs 550 crore in dues for equipment supplied to it.

NCLT had approved the appointment of consulting firm RBSA as the resolution professional for RCom and two of its subsidiaries — Reliance Infratel and Reliance Telecom — at the time.

RCom later got a stay on the insolvency proceedings by promising to repay Ericsson’s dues within a stipulated time frame at the national company law appellate tribunal (NCLAT). Earlier this year, after its proposed deal with Reliance Jio fell through, RCom sought to withdraw its application from the NCLAT, but this was opposed by the Swedish equipment maker.

The dispute between the two parties is now being adjudicated upon by the Supreme Court.

RCom has been unsuccessful in repaying creditors despite numerous attempts at settlements. The proposed deal to sell spectrum to Mukesh Ambani’s Jio that would have helped the company shed some of its debt has also failed to make headway.

RCom stopped wireless telephony services to customers in late 2017 and said it would only focus on its B2B offerings to reduce costs.

The Economic Times reported