Shares of Reliance Communications plunged by over 48% in morning trade today, dropping to an all-time low of Rs 6. On Friday, the Anil Ambani company announced in a regulatory filing that it will be filing for bankruptcy and will seek fast-track resolution following its failure to sell its assets to repay lenders. The stock is currently trading at Rs 7.75 apiece on the BSE and is down 46% in the year so far.
More than 120 million shares of RCom changed hands in less than 45 minutes of trade compared to its 30-day average of 63 million shares, Reuters reported. Heavy selling was also seen in other group shares, with Reliance Power cracking 29.22% followed by Reliance Capital (down 19.37%), Reliance Infrastructure (16.51%) and Reliance Naval and Engineering (13.7%) on the BSE.
It is estimated that RCom has been reeling under debt of over Rs 46,000 crore. The board of directors on Friday reviewed the progress of the company's debt resolution plans since the invocation of strategic debt resolution on June 2, 2017. The company said the board noted that despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway.
Following this development, RCom's operational creditor Ericsson, which is owed Rs 550 crore, is reportedly set to file yet another application in the Supreme Court to safeguard its interests. Last month the Swedish telecom equipment maker had filed its second contempt petition in the Supreme Court against Ambani, requesting the government to issue directions to prevent Ambani from leaving the country and sought jail term for him unless all dues were cleared. Ambani is scheduled to appear in the top court next week in connection with this petition.
"The contempt cases against the chairman will continue and as per SC's orders Ambani will have to appear on February 11," a source aware of the development told The Economic Times. "Applying for bankruptcy is another way of circumventing the top court's orders to pay us Rs 550 crore."