RCom shares surge 56.87% after reports of Ericsson settlement talks
Mumbai: Debt-laden Reliance Communications Ltd surged over 56% on Thursday afternoon after a news report suggested that the company is in talks with Swedish telecom firm Ericsson for settlement.
In intraday trading, RCom share price rose 69.67% to Rs17.90 a share. At closing, the stock pared some gains to Rs16.55, up 56.87% from previous close.
The RCom stock has declined 61% so far this year.
RCom and Ericsson will inform the Mumbai bench of the National Company Law Tribunal (NCLT) they are in settlement talks, TV channel BTVI quoted unnamed people as saying.
Earlier, Mint reported that the NCLT admitted a plea filed by Ericsson which has stalled RCom’s plan to sell its assets to Reliance Jio Infocomm Ltd. RCom was seeking to reduce its $7 billion debt with this deal.
Ericsson has sought Rs1,154 crore from RCom and two of its arms—Reliance Telecom Ltd and Reliance Infratel Ltd—after having signed a seven-year deal in 2014 to operate and manage RCom’s nationwide network.
In December 2017, Reliance Jio agreed to buy a majority of the wireless assets of RCom for an undisclosed amount. Both companies signed agreements for sale of wireless spectrum, tower, optical fibre network and media convergence node assets.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
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