Reliance Communication (RCom) - the telecommunications company's shares dwindled by 13% today. The reason behind the decline is the news that the National Company Law Tribunal has accepted a petition from the Indian unit of network-equipment maker Ericsson AB against Reliance communication.
Following this, the NCLT has ordered to halt the insolvency proceedings which was supposed to be initiated for Reliance Communications. This has blocked the company's proposed Rs 25,000 crore asset sale to Reliance Jio Infocomm Ltd, owned by Mukesh Ambani.
NCLT has accepted a petition from the Indian unit of Ericsson AB regarding recovery of Rs 1,160 crore in the form of unpaid dues.
The next step will be the formation of the committee of creditors, following this the competitive bidding procedure will in initiated for taking over of the company.
The current ruling has come in as a big blow to the company which was trying to monetize assets in order to repay its debt.
Rcom had chalked a plan to sell the company's Spectrum, Towers, Fiber and Telecom Infrastructure assets to Reliance Jio. The plan during its nascent stages faced severe setback with the Supreme Court of India and NCLT ordering stays on the process.
Rcom has informed the exchanges that the company along with its subsidiaries - Reliance Telecom and Reliance Infratel, awaits the detailed orders from the NCLT following which they will decide the next course of action after studying the orders.
Reliance Communications shares are currently trading at Rs 10.05, down by 18.95 percent (Rs -2.40) from its previous closing of Rs 12.40 on the BSE.