"The Board noted that, despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetization plans, and the overall debt resolution process is yet to make any headway", the debt-ridden telecom operator said in the statement.
Reliance Communications said that it had to opt for insolvency because of lack of 100% approvals and consensus, as mandated by RBI's 12th February 2018 circular, on all important issues, amongst over 40 lenders, Indian and foreign despite the passage of 12 months and over 45 meetings, besides the numerous legal issues it faced at various courts.
The NCLAT process involves the appointment of an external debt resolution officer, who will be in charge of most affairs of the company and will strive to generate the best solution possible for all stakeholders.
"Accordingly, the Board decided that the company will seek to fasttrack a resolution through NCLT, Mumbai". RCom has already completed the sale of its media convergence nodes and related infrastructure assets worth ₹ 2,000 crore, besides selling fibre worth ₹ 3,000 crore to Reliance Jio.
It is to be noted that in May previous year, the NCLT had admitted RCom and its two subsidiaries - Reliance Telecom Ltd (RTL) and Reliance Infratel Ltd (RIL) to a resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC) after a petition by Ericsson.
But RCom has still not paid Ericsson, triggering contempt of court petitions in the Supreme Court against the telco's chairman Anil Ambani, with the spectrum sale to Jio having been rejected by the Department of Telecommunications (DoT).
"Jio's letter to DoT was practically the last nail in the coffin..."
"RCom board of directors decides upon implementation of debt resolution plans through NCLT framework", the company said in a statement. But Jio has stuck to its stance, following which DoT has also repeatedly refused to clear the deal, leading to a stalemate. RCom had promised to pay the dues of Rs 550 crore to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel from the proceeds.