Ericsson’s Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues of Rs 1,150 crore, the mobile operator said in a stock exchange filing on Wednesday.

This led shares of Reliance Communications to fall as much as 2.3% in early trading on Thursday.

Ericsson, a Swedish telecoms equipment maker, signed a seven-year deal in 2014 to operate and manage Reliance Communications’ nationwide network. “Ericsson has done this as a last resort to resolve an issue regarding debt that Reliance owes to Ericsson for services provided under a contract,” Reuters quoted the Swedish firm as saying.

The Anil Ambani-controlled Reliance Communications said it planned to challenge the insolvency petitions. They come as the company is trying to seal deals to sell stake in its mobile tower assets business to Canada’s Brookfield and to merge its mobile services business with rival Aircel.

The National Company Law Tribunal, the designated court for bankruptcy cases, will take up the matter on September 26.

R-Com making losses

Last month, Reliance Communications reported its third quarterly loss in a row. It is trying to find ways to cut its debt after creditors gave it a reprieve on loan repayments until the end of 2017.

The company’s losses are, in part, a result of competition from free voice and cut-price data plans offered by Reliance Jio Infocomm, the telecom start-up backed by Anil Ambani’s elder brother Mukesh Ambani.