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Report: ICBC, China's Eximbank to back bankruptcy petition against RCom

Industrial & Commercial Bank of China Ltd. and Export-Import Bank of China plan to back China Development Bank's bankruptcy petition against Indian telecommunication company Reliance Communications Ltd. in an effort to recover about US$2 billion in debt, Reuters reported Dec. 5, citing "three people with knowledge of the matter."

ICBC and China's Eximbank are said to be "on the same page" with China Development Bank and could file their own petitions at India's insolvency court against Reliance Communications unless the parties reach an out-of-court settlement. China Development Bank's petition is not filed on behalf of ICBC and China's Eximbank, one of the sources said.

India's National Company Law Tribunal is set to hear China Development Bank's petition on Dec. 18, Reuters reported Dec. 6.

State Bank of India is Reliance Communications' top lender. The company has been trying to restructure its debt via a debt-for-equity swap, but has failed to arrange deals that would have paved the way for a swap. The company has since pledged to repay its debt via a new asset sales program.

The Chinese banks, however, are frustrated that the company has not been able to keep its promises on debt repayment, one of the sources said.

It is not yet clear if other members of the banks' consortium would oppose China Development Bank's move. Currently, there are no concrete mechanism for the banks to block an insolvency proceeding initiated by one of their peers, the sources said.

ICBC declined to comment on the report. Reliance Communications, China Development Bank, China's Eximbank and State Bank of India did not immediately respond to Reuters' requests for comment.