For over a year India's Reliance Communications has hovered on the brink, negotiating with those it owes money and those who might buy its remaining business units in order to come up with a pathway to survival. Over the weekend they finally ran out of dancing room and filed for bankruptcy protection in Mumbai, and this time it may be for good.
It's a huge story in the Indian telecommunications space, and yet almost not a story at all anymore since it has felt like they were already there. RCom's fall has been a slow motion disaster years in the making, and in any other regulatory and legal environment would have been over long ago. One potential deal after another failed to satisfy the company's creditors, whether for unpaid network outsouring fees from Ericsson or for spectrum dues owed to India's government itself.
So now what? You guessed it, RCom has yet another a new plan under which it will sell its assets to resolve its debt situation and it looks just like the old one. The only difference now is that they once again have to make their case to a judge through India's National Company Law Tribunal rather than directly to creditors. Under new insolvency laws, they now only need approval by 2/3 of creditors rather than the unanimity previously required. Sounds great, but it also leaves the company's eventual fate in others' hands.
The fate of Global Cloud Xchange, the company's international bandwidth and submarine cable subsidiary, is now clouded even further. RCom had hoped to sell off its wireless business and other assets in India before opening a sale process for that asset, but now that potential liquidation is nearer all bets may be off.