Reliance Communications Ltd (RCom) shares plunged by more than half to a record low on Monday, after the Indian telco said it will seek a fast-track resolution to its indebtedness through bankruptcy court.
In one of India's most high-profile bankruptcy filing cases, RCom said lack of regulatory approval for asset sales as well as cases pending at the Supreme Court and Telecom Disputes Settlement and Appellate Tribunal (TDSAT) resulted in its decision to approach the National Company Law Tribunal (NCLT).
The Mumbai-based telco also said its lenders had not received any proceeds from asset monetisation plans, and that its overall debt resolution process had not made any progress.
Competition in India's telecoms industry has stepped up several levels since the 2016 entry of cut-price player Reliance Jio Infocomm Ltd, leading to RCom shutting down its wireless communications business. Reliance Jio is owned by Mukesh Ambani, the elder brother of RCom owner Anil Ambani.
RCom has been left owing banks $7 billion as of March 2017 when it last made its debt level public, and more to vendors.
It had agreed to sell assets to Jio and Canada's Brookfield Asset Management Inc and use the proceeds to pay off dues owed, including to Swedish telecom equipment maker Ericsson. However, it has not yet received approval from the telecom ministry to proceed with any sale.
Under the court-led restructuring, which it aims to complete within 9 months, RCom said on Sunday it will continue to pursue the sale of all telecom infrastructure assets and spectrum, seek to monetise its assets and sell and develop real estate.
Ericsson declined to comment on Monday. Jio, Brookfield and the Department of Telecommunications could not be reached for comment.
RCom shares plunged as much as 54.3 percent to 5.3 rupees apiece on Monday. The stock has shed 19.4 percent so far this year as of Friday's close. Over 290 million RCom shares changed hands by 0739 GMT, compared with its 30-day average of 63 million.
RCom was worth 1.69 trillion rupees ($23.6 billion) at its peak in 2008. It is now worth less than $330 million.
