Swedish company Ericsson's Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues. The telecoms equipment maker is seeking a total of Rs 11.55 billion from the three companies, as per a stock exchange filing. Ericsson had signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide network. Its filing said the case would go before the National Company Law Tribunal on September 26.
It said, “Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract. As the legal process is ongoing, we don't have any further comments at this point.” Anil Ambani-owned Reliance Communications reported its third quarterly loss in a row last month and is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017. The losses are partly a result of competition from free voice and cut-price data plans offered by Reliance Jio Infocomm, owned by his elder brother Mukesh Ambani.
Ericsson aims to recover Rs 4.91 billion from Reliance Communications, Rs 5.35 billion from Reliance Infratel, and Rs 1.29 billion from Reliance Telecom.
