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Providing a relief to debt-ridden Reliance Communications (RCom), the Supreme Court has put an RBI ruling in abeyance and prevented lenders from taking the company back to the insolvency court. The apex court has set October 11 for the next hearing. The SC ruling is applicable only for RCom.
This follows a Department of Telecommunications’ (DoT) notice last week to RCom, asking it to pay ₹2,900 crore as Spectrum Usage Charges (SUC) or provide bank guarantees for the same. On Thursday, RCom moved the apex court against the notice as an earlier RBI regulation had set August 28 as the deadline for settlement of all Insolvency and Bankruptcy Code (IBC) cases, sources briefed on the matter told BusinessLine .
RCom had earlier paid about ₹2,000 crore bank guarantee as SUC dues, and moved the Telecom Disputes Settlement Appellate Authority (TDSAT) on the issue.
A February 12, 2018 RBI regulation stated that if an IBC case was not resolved after August 28, lenders could take the company back to bankruptcy proceedings. Today’s ruling gives RCom time to bring the legal case to a logical conclusion, before it can dragged back to IBC proceedings, they added.
According to the sources, banks are also not keen to take the company back to IBC as it has already “monetised” infrastructure worth ₹5,000 crore. Now, the company is looking to pare its debt of about ₹42,000 crore by offloading telecom towers and spectrum. Further, on Friday, the Supreme Court directed the Kolkata High Court to hear RCom’s One-Time Spectrum Charges (OTSC) case in two weeks. It also asked the High Court to decide the issue in another two weeks.
RCom and its subsidiary Reliance Telecom had approached the TDSAT contesting the demand for bank guarantees for OTSC due towards payment of market-linked prices for excess spectrum held by a telco, which the DoT raised in July 2015. RCom had earlier moved the telecom tribunal to quash a DoT order that threatened to cancel its plans to sell its spectrum to Reliance Jio, unless it paid an additional ₹774 crore as bank guarantees.
In their petition, the companies claimed that the payment of ₹774 crore, for which the licensor had raised a demand, was made to the DoT though encashment of bank guarantees. Now, RCom needs to renew encashed bank guarantees, payable in 2019.
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