Beleaguered telecom major Reliance Communications is believed to have reached an out-of-court settlement with Swedish telecom gear manufacturer Ericsson, a move that will enable the Anil Ambani group company to proceed with its asset-sale plans. The move will also help RCom avoid the bankruptcy proceedings sought by Ericsson in a filing before the National Company Law Tribunal’s (NCLT) Mumbai bench.

Executives of both companies met today and decided to settle the dispute, which has been going on for the past eight months. Now,, both the parities will jointly move the National Company Law Appellate Tribunal (NCLAT) to withdraw the bankruptcy proceedings, saud sources close to the development.

On Thursday, the companies’ lawyers informed the NCLT’s Mumbai Bench, which was hearing the case, to keep its order in abeyance till the legal aspects in mutually withdrawing the case were sorted out. The lawyers have also asked for a deferment in the appointment of the Interim Resolution Professional (IRP), another source said, adding: “they are exploring the legal validity of withdrawing an IBC case”.

The lawyers were of the opinion that there were instances of both NCLT and NCLAT permitting withdrawal of Insolvency and Bankruptcy Code (IBC) cases following a settlement between parties.

However, the contours of the settlement were not immediately divulged.

The settlement, if approved, will enable RCom and its subsidiaries — Reliance Infratel and Reliance Telecom — to exit the IBC process, while RCom’s proposal to sell its wireless assets to Reliance Jio Infocomm will proceed as per plan.

When contacted, an RCom spokesperson declined to comment. Ericsson, too, declined to comment on what it termed market speculation.

Ericsson had moved the NCLT seeking bankruptcy proceedings against RCom and its two units (Reliance Infratel and Reliance Telecom) to recover dues of ₹1,150 crore, a move that jeopardised RCom’s bailout package.

Following the bankruptcy filings, RCom’s market cap nosedived to about ₹2,900 crore as the stock prices fell by 15 per cent to touch a low of ₹9.95 on Wednesday. The company’s share price rose three-fold from a low of around ₹10 this year after RJio announced plans to buy RCom.

In December 28, 2017, Mukesh Ambani-led RJio had emerged as the white knight to acquire the wireless assets of RCom, controlled by his younger sibling, Anil. While the companies did not divulge the financial details, banking sources pegged the deal at about ₹23,000 crore.

On Thursday, RCom’s share prices closed up 56.87 per cent to ₹16.55, after soaring 69.67 per cent in intra-day trading, on a weak BSE.

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