India

Shares in India’s Reliance Communications fell by as much as 9.4 per cent on Tuesday morning following reports that the troubled telecom group’s largest creditor, China Development Bank, has launched action against it under India’s new insolvency law, the Financial Times reported. In a statement on Monday evening, RCom – controlled by tycoon Anil Ambani – had denied any knowledge of the reported petition, which could force it into liquidation if it fails to satisfy creditor demands.

India’s highest-profile default this year and the government’s plan to inject capital into state-controlled lenders have thrust the nation’s bad debt into the spotlight, Bloomberg News reported. Some global debt funds increasingly like what they see. The nation’s so-called dirty dozen -- 12 large debtors that have been ordered to go through the bankruptcy courts -- are one focus for funds including Bain Capital Credit and alternative investment firm Varde Partners.

India has set up a panel to review provisions of the 11-month old bankruptcy law including whether to bar defaulting founders from repurchasing assets, Bloomberg News reported. The committee set up to improve The Insolvency and Bankruptcy Code will have 14 members and includes officials from the finance ministry, Reserve Bank of India and representatives from industry and accountants group, Corporate Affairs Minister P.P. Chaudhary said in an interview on Monday. The code in force since December 2016 aims to accelerate winding up process of loss-making companies or recovering dues.

Two companies controlled by tycoons Malvinder and Shivinder Singh announced a reorganization as the brothers wrestle with debt and legal tangles, Bloomberg News reported. The Singh brothers’ Religare Enterprises Ltd. announced a shakeup late Tuesday, with Malvinder stepping down as non-executive chairman of the financial services and small-business lender while four other officials also resigned.

The first default on U.S. dollar bonds by an Indian company in 15 months may become a closely-watched test case for how international creditors will fare under the country’s new bankruptcy laws, Bloomberg News reported. Reliance Communications Ltd., the Indian mobile phone operator controlled by billionaire Anil Ambani, failed to pay a coupon on its 2020 dollar notes before the expiry of a grace period on Monday, according to a person familiar with the matter. It’s India’s most high-profile default on international debt since the nation’s insolvency and bankruptcy code was passed in May 2016.

Shares and bonds in Reliance Communications, the struggling telecoms group run by billionaire tycoon Anil Ambani, plummeted to record lows on Monday after the company announced heavy losses over the weekend and confirmed it had missed debt repayments, the Financial Times reported. RCom said on Saturday that it had lost Rs28.2bn ($431m) before tax in the three months to the end of September, having lost Rs1.2bn in the same quarter last year. It also confirmed it had missed two rupee-denominated bond repayments in recent weeks, having entered a formal debt restructuring two weeks ago.

Reliance Communications Ltd., the Indian mobile phone operator controlled by billionaire Anil Ambani, said it isn’t paying a dollar bond coupon, Bloomberg News reported. The failure to honor the obligation marks the company’s first missed interest payment on a note in the U.S. currency, and represents the latest setback amid a shakeout in the world’s second-largest telecom market. The firm announced last month the collapse of its merger plans with rival Aircel Ltd., a deal which could have helped it pare debt and better compete with rivals.

Shares in Reliance Communications jumped as much as 15.6 per cent after the troubled Indian telecom company announced a debt restructuring proposal that would hand a majority equity stake to its creditors, the Financial Times reported. RCom, controlled by tycoon Anil Ambani, has been struggling to service around Rs450bn ($6.9bn) of debt amid a price war launched by new entrant Reliance Jio, run by Mr Ambani’s brother Mukesh. Late on Monday night RCom said that, if lenders accept its plan, Rs70bn of its debt would be converted into 51 per cent of its equity.

The head of a credit fund under Indian billionaire Uday Kotak’s financial group says the government’s pledge of capital for beleaguered state banks could make it easier for distressed funds to buy loans, Bloomberg News reported. The Indian government said last week that it will inject 2.11 trillion rupees ($32 billion) of capital into state-controlled lenders over two years, as it seeks to revive growth in Asia’s third-largest economy.

The shine has come off India’s growth. Most countries would crave a growth rate as high as 5.7 per cent, but this is a setback for a country that recently boasted of growth rates higher than China’s. The slowdown exposes underlying fragilities that no triumphalist talk could conceal. What lessons the government takes from this, and how it responds, will determine the contours of the economy and its growth prospects for a long time, the Financial Times reported. The call for reforms has not gone unheeded by the government of Narendra Modi.