The Supreme Court on Friday permitted debt-ridden Reliance Communications (RCom) to settle a dispute with the Indian unit of Swedish telecom equipment manufacturer Ericsson AB. The Anil Ambani group company now expects to complete its proposed wireless assets sale to Reliance Jio Infocomm by September 30.
Following a personal assurance from RCom Chairman Anil Ambani, a two-judge Bench headed by Justice RF Nariman directed RCom to pay ₹550 crore to Ericsson by September 30. The court also directed Ambani to give an undertaking to Ericsson. Further, the court will hear RCom’s insolvency petition on October 2.
According to sources, RCom now expects to complete its proposed assets sale for about ₹25,000 crore in the next three weeks and reduce its exposure to lenders by 50 per cent. RCom, which has a total debt of ₹42,000 crore, owes about ₹20,000 crore to a clutch of lenders led by State Bank of India.
In September last year, Ericsson moved the National Company Law Tribunal (NCLT) seeking bankruptcy proceedings against RCom and its two units — Reliance Infratel and Reliance Telecom — to recover dues of ₹1,150 crore. Later, it moved the National Company Law Appellate Tribunal (NCLAT) seeking insolvency of RCom. NCLT, in its orders of May 15 and May 30, permitted RCom to proceed with its asset monetisation plans, subject to conditions. In July, RCom moved the Supreme Court seeking to quash the NCLT orders.
Today’s Supreme Court order permits RCom to conclude its earlier proposed sale of wireless assets, including spectrum, telecom towers, India optical fibre and Multi-Connectivity Nodes to RJio. The sale of assets, expected to be completed by September 30, will slash RCom’s debts by over 50 per cent, sources said.
This ₹25,000 crore comprises about ₹18,000 crore in cash and ₹7,000 crore in deferred spectrum payment liabilities, which will be transferred to RJio. This will enable RCom to reinstate the bank guarantees that were encashed by the DoT earlier this year for deferred spectrum payment liabilities.
Further, RCom is also looking to raise another ₹3,700 crore by selling its remaining 850 MHz spectrum. The company had earlier entered into an agreement to sell the spectrum to RJio.
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