RCom shares surge 46% after reports of Ericsson settlement talks

RCom shares on Thursday rose as much as 45.97% to Rs15.40 a share on news of a likely settlement between RCom and Ericsson
Ericsson has sought Rs1,154 crore from Reliance Communications (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 the telecom firm’s nationwide network. Photo: Bloomberg
Ericsson has sought Rs1,154 crore from Reliance Communications (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 the telecom firm’s nationwide network. Photo: Bloomberg

Mumbai: Debt-laden Reliance Communications Ltd surged over 46% on Thursday afternoon after a news report suggested that the company is in talks with Swedish telecom firm Ericsson for settlement.

On Thursday, RCom shares rose as much as 45.97% to Rs15.40 a share. So far this year, it has declined 60.52%.

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.