Reliance Communications will file for insolvency, the company confirmed last month
Reliance Communications‘ chairman Anil Ambani has avoided a custodial sentence as his company completed the payment of $77m to Swedish network equipment provider Ericsson.
The money was due to have been paid by the end of 2018 and Ambani was given until the 20th March 2019 to make payment of the outstanding dues or face imprisonment for contempt of court.
In January of this year, Ericsson India petitioned the Indian Supreme Court with a contempt of court order, in an attempt to force payment of the outstanding monies. Had Ambani failed to make the subsequent payment, he would have faced a sentence of up to three months in an Indian jail.
In February, Ambani confirmed that RCom would be filing for insolvency as its levels of debt reached unsustainable levels.
“The Board believes this course of action will be in the best interests of all stakeholders, ensuring comprehensive debt resolution in a final, transparent and time bound manner within the prescribed 270 days,” a statement from RCom read.
RCom has been involved in a brutal price war with its competitors, chiefly led by Reliance Jio, which has reduced profit margins to almost zero. India remains one of the most competitive telecoms markets in the world.
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