27 May 2019: Reliance Communications (RCom) widened its loss to Rs 7,963 crore for the January to March quarter when compared to the previous quarter where it posted a loss of Rs 340 crore . The Anil Ambani owned telecom operator under the reins of interim resolution professional is unsure if it can continue under the burden of losses and liabilities.
“…since the Company continues to incur loss, current liabilities exceed current assets and Company has defaulted in repayment of borrowings, payment of regulatory and statutory dues, these events indicate that material uncertainty exists that may cast significant doubt on Company’s ability to continue as a going concern,” said the company in a regulatory filing on Monday evening.
The telco had posted a loss of Rs 19827 crore during the same period last year.
RCom which has seen its spectrum trading alliance with Reliance Jio get called off posted a total income of Rs 1089 crore compared to Rs 976 crore when compared on a like to like basis.
The telco has also highlighted its concerns over its subsidiary-GCX Limited and said its value has been eroded. . “In GCX Limited, an overseas subsidiary of the Company, pursuant to 7% Senior Secondary Notes …amounting to $350 million falling due for repayment in the month of August 2019, the current liabilities exceed current assets by $331 million,” said the bankrupt telco in its filing. “This indicates the existence of material uncertainty relating to Going Concern of GCX Limited and its two material subsidiaries which have guaranteed the Notes. In three other overseas subsidiaries entities also, it indicates the existence of material uncertainty as networth has been eroded,” it added.
The telco which renewed its bankruptcy proceedings after staving it off for about a year, may become one of the biggest insolvency cases in India Inc. ET had earlier reported that lenders to RCom are expected to claim dues of up to Rs 90,000 crore, almost double the Rs 46,000 crore debt that the telco has in its books, making it among the highest demanded from companies that have gone for insolvency.
The company and some of its subsidiaries have not provided Interest of Rs 1,183 crore and Rs 4,389 crore for the quarter and year: ended March 31, 2019 respectively and foreign exchange variation aggregating to Rs 303 crore gain and Rs 984 crore loss for the quarter and year ended March 31, 2019 respectively. “Had the Company provided Interest and foreign exchange variation, the Loss would have been higher by Rs 880 crore and Rs 5,373 crore for the quarter and year ended March 31, 2019 respectively,” said the telco. The IRPs appointed for Rcom and its two units will submit a progress report on the Corporate Insolvency Resolution Process (CIRP) by May 30 to the dedicated bankruptcy court.