Saturday , May 25 2019

RCom rises 70% on report of out-of-court talks with Ericsson


Reliance Communications Ltd., the telecom arm of billionaire Anil Ambani, climbed by a record after a report that the indebted company is in settlement talks with the Indian unit of Ericsson AB, which this week won a petition to place the wireless carrier in insolvency proceedings.
Shares of RCom, as the company is known, surged as much as 70 percent on Thursday after BTVI reported in a Twitter post that both companies are said to have informed India’s bankruptcy court, the National Company Law Tribunal, about their talks. They have requested that the court hold off on its insolvency order, BTVI reported, citing
unidentified people. A RCom spokesman declined to comment. Ericsson representatives in Sweden couldn’t immediately comment.
The bankruptcy court’s decision was a setback to RCom’s planned sale of airwaves, towers and fiber assets to Reliance Jio, the phone company owned by Ambani’s older brother Mukesh, who is India’s richest man. The deal for about $3.7 billion, struck in December, is crucial to RCom’s effort to reduce its $7 billion debt load. Ericsson is seeking to recover $171 million in unpaid dues.
The company’s shares traded 58 percent higher at 16.55 rupees in Mumbai, still down 54 percent this year. Its 2020 dollar bonds rose 1.9 cents on the dollar to 51.9 cents in Hong Kong. A company court in New Delhi separately deferred the hearing on a lawsuit against RCom filed by HSBC Daisy Investments (Mauritius) Ltd. to May 24. A unit of HSBC Holdings Plc, it is a minority shareholder in RCom’s tower unit and has been protesting the asset sale.

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