Beleaguered Indian telecom company Reliance Communications, which is battling to clear a debt of around 458 billion rupees (US$7.15 billion) to various lenders, has reportedly sought an out-of-court settlement with China Development Bank (CDB).
Reliance and CDB had on Friday approached the National Company Law Tribunal (NCLT), a quasi-judicial body in India that adjudicates issues relating to companies, for an adjournment of the latter’s insolvency petition until next month, Business Standard reports.
CDB had lent $1.78 billion to Reliance and on November 27 filed the petition under the Insolvency and Bankruptcy Code (IBC) after the company defaulted on its dues.
The petition came at a time when the state-owned banks were in talks with Reliance for converting a part of their debt into equity.
CDB was the first to file for insolvency against RCom, although it was part of the joint lenders’ forum set up by Indian banks. The Indian lenders did not join the petition filed by the Chinese lender and chose to negotiate with the company for asset sales, the daily added.
Reliance Communications is owned by Anil Ambani, the younger brother of India’s richest man Mukesh Ambani. It had earlier attempted to merge with another troubled telecom company, Aircel, to tide over the financial crisis, but the plan fell apart because of various legal and regulatory issues.