Dropping to an all-time low rate of Rs 6, the shares of Reliance Communications plummeted down to 48 percent in morning trade today. To seek fast track resolutions following its failure to pay back the lenders by selling its assets, the Anil Ambani Company has announced that it will be filing for bankruptcy. On Monday at 11 am, the shares were trading down 37.5% at ₹7.3, which all total valued the company at ₹ 2,054 crores or 20 times lower than its debt to the bankers. The stock is currently trading at Rs 7.75 per piece, around 38 percent down from its previous close of Rs 11.6 on the Bombay Stock Exchange.
The company which has a debt of over Rs 40,000 crore stated that this decision has been taken in accordance to their board being unable to get a 100 percent approval of all 40 lenders on any matter as mandated by RBI’s 12th February 2018 circular. Despite having over 45 meetings in the last 12 months with the lenders, Reliance Communications said that it has been “impossible” to come to a decision and achieve approval on the debt resolution. The company also mentioned the already pending several legal issues at various high courts, Telecom Disputes Settlement & Appellate Tribunal (TDSAT) and the Supreme Court, as a reason for approaching the NCLT (National Company Law Tribunal).
Other Anil Ambani-led Reliance group companies felled as well. Reliance Capital, Reliance Infrastructure and Reliance Naval, including the other companies, fell 5-10 percent as well. Reliance Capital shares fell to 19% to Rs 154.50 on Monday morning. The company stated that “Recurring legal challenges by Department of Telecommunications (DoT) for spectrum monetization and continuing litigation by other parties support the decision to opt for the NCLT resolution track.”
Two of the RCom subsidiaries, Reliance Telecom and Reliance Infratel, including the company itself, will shortly take appropriate measures to implement the board decision. RCom also mentioned that there will be no apparent impact on the business and operations of other subsidiaries of the company, which include inter alia GCX, Reliance IDC, etc.