More trouble is brewing for debt-ridden Reliance Communications (RCom), with China Development Bank (CDB) filing an insolvency case against the telecom company, a move that would be opposed by Indian lenders. CDB, a lender to RCom, has filed the suit with the National Company Law Tribunal (NCLT) in Mumbai under the Insolvency and Bankruptcy Code (IBC).

Also read: Lenders to block insolvency suit against Reliance Communications

RCom, which is reeling under a ₹45,000-crore debt, owes about ₹7,500 crore to CDB. With interest, this increases to about ₹9,000 crore. This makes CDB the first lender to file insolvency proceedings against billionaire Anil Ambani-controlled RCom.

The tribunal is likely to hear an admission plea in the coming weeks, sources close to the development said, adding that it has appointed Alvarez & Marsal (A&M) India as resolution professional.

According to sources, the Indian lenders are likely to oppose the insolvency case when it comes for hearing before NCLT.

“The insolvency petition is being filed just weeks ahead of RCom lenders’ earlier announced intention to convert ₹7,000 crore of debt into 51 per cent of equity. The IBC filing is likely to derail this process, so the lenders will oppose this move,” another source said.

Appointment of IRP Further, the Indian lenders would seek appointment of an Insolvency Resolution Professional (IRP) to oversee the issue, he added.

While CDB could be immediately reached for comments, RCom said it is yet to be served any notice of the application filed by CDB. “The company is engaged through the joint lenders forum with all its lenders for a successful resolution of the Strategic Debt Restructuring (SDR) process. CDB also been actively participating in the JLF,” a company spokesperson said. “The company is, therefore, surprised by the untimely and premature action of CDB of filing an application at NCLT. The company continues to remain engaged with all lenders, including CDB, and is confident and committed to a full resolution with the support of all the lenders,” the spokesperson added.

At its Annual General Meeting on September 26, RCom shareholders had approved the issuance of equity shares to lenders by converting loans.

According to a debt resolution proposal made to RCom’s domestic and foreign lenders, the Anil Ambani-controlled company is making another attempt to pare its ₹45,000-crore debt.

Now, RCom intends to repay up to ₹17,000 crore through monetisation of assets, and another ₹10,000 crore through the sale and development of real estate space.

The company is also looking to sell some of its assets to the Mukesh Ambani-backed Reliance Jio. The company declined to provide details of these assets citing non-disclosure agreements.

Under the latest proposal, which was made on October 30 to the lenders, RCom was aiming for a Zero Loan Write-Off Plan, which means lenders don’t have to take haircuts.

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