Ericsson's Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues, the Indian mobile operator said in a stock exchange filing on Wednesday.
The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide network, is seeking a total of Rs1,155 crore ($180 million) from the three companies, the filing said.
Reliance Communications said it planned to challenge the insolvency petitions. The filing said the Ericsson case would go before the National Company Law Tribunal, the designated court for bankruptcy cases in India, on Sept. 26.
"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 Swedish company said.
The petitions come as the Indian phone company controlled by billionaire Anil Ambani races against time to seal deals to sell a stake in its tower assets to Canada's Brookfield and to merge its mobile services business with rival Aircel.
Reliance Communications reported its third quarterly loss in a row last month and is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017.