A statement last night from the two companies said that he will “focus full time at the helm of GCX during its corporate restructuring process”. This process took a new turn last week when GCX filed for Chapter 11 bankruptcy protection in the US.
Barney (pictured) said: “It has been an honour to be entrusted with the leadership of RCom over the past three years. With GCX’s recent voluntary Chapter 11 filing, it will be in the best interest of both RCom and GCX for me to step down at this time to focus on GCX restructuring. Upon emergence from this process, GCX expects to be well-positioned to aggressively pursue our business plan independent of the overhang caused by our corporate parent’s challenges.”
Legally GCX remains a subsidiary of RCom, but RCom has lost all power and influence over it. The Chapter 11 filing of the US Bankruptcy Code effectively cedes control to GCX’s creditors, which are looking for at least $366 million for the company.
But at the same time GCX has put itself up for sale to a private equity or industry buyer – perhaps one prepared to pay more, even as much as the $1.1 billion that, Capacity understands, was being discussed by potential buyers a year ago.
In either case the deadline is the same, 13 November, when the UK Bankruptcy Court meets in Wilmington, Delaware, to review options and bids. GCX says it has enough funds to continue to trade until then.
Meanwhile RCom is going through the rather slower Indian corporate bankruptcy process. It lost its mobile business, largely to the carnage across the Indian industry that began with the start-up of Reliance Jio – the only connection between RCom and Jio being that they are headed by rival brothers in the Ambani family.
The US Bankruptcy Court meets again in Wilmington at noon on Friday, in order to review the process over the next few weeks – to approve “bidding procedures for the sale of substantially all of the debtors’ assets”, to schedule an auction, to approve “the form and manner of notice thereof”, to approve “certain bid protections”, and to grant “related relief” (PDF here)
Ironically, the building in which the court meets, 824 North Market Street in Wilmington, “was acquired out of bankruptcy by one of [the real estate company’s] national financial partners”, according to its website listing accommodation available.
