India’s National Company Law Tribunal has ordered Reliance Communications (RCom) and Ericsson to settle an INR11.5 billion ($177 million) insolvency case within the next week.
The case was launched by the Swedish vendor in September 2017, with the firm claiming that it was owed the sum by RCom and several of its subsidiaries. While the matter would be resolved if the firms comply with the tribunal’s order, there are obstacles: RCom is required by an arbitration court to receive permission before selling or transferring ownership of any of its assets, following a ruling last week.
The restriction is a result of an interim order forced upon RCom as a result of Ericsson’s legal challenge; RCom plans to dispute it in court. In February, RCom’s board approved a plan to sell the operator’s wireless assets to Reliance Jio Infocomm, with the goal of closing the deal by March. The sale has reportedly been cleared by the Competition Commission of India (CCI).
In November 2017, following the collapse of a proposed merger with Aircel due to “inordinate delays caused by legal and regulatory uncertainties”, RCom announced that it would wind down most of its wireless operations due to increasingly intense competition in the market.