Ericsson filed a petition against Indian telecoms and media company Reliance Communications (RCom) and its subsidiaries over INR11.56 billion ($180 million) the Sweden-based vendor said it is owed.
In a statement, Ericsson said the legal action filed with the National Company Law Tribunal (NCLT) in India was a “last resort” to resolve the issue. RCom intends to challenge the action.
The Swedish equipment vendor is seeking INR4.91 billion from Reliance Communications, INR5.35 billion from subsidiary Reliance Telecom and INR1.29 billion from towers unit Reliance Infratel.
In an emailed statement, the vendor said: “Ericsson can confirm that the company has filed an insolvency petition against Reliance Communications in the National Company Law Tribunal in India. Ericsson has done this as a last resort in order to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract.”
“As the legal process is ongoing, we don’t have any further comments at this point.”
The case was adjourned by the NCLT until September 26.
The petition comes during a turbulent period for Reliance Communications. The company’s mobile unit is under severe pressure as a result of a fierce price war sparked by the entry of discount provider Reliance Jio in September 2016.
In its latest financial results, RCom booked a loss of INR12.2 billion for the three months to the end of June. In a bid to cut its debt, the company is in the process of completing a merger with fellow operator Aircel, and earlier this year agreed a deal to sell a 51 per cent stake in its tower business to Canadian investment company Brookfield.