Senior officials of debt-ridden Reliance Communications and new telecom operator Reliance Jio Wednesday met Telecom Secretary Aruna Sundararajan to resolve issues flagged by the Department of Telecom (DoT) around payment related to the spectrum sale deal between the two firms.
Senior officials of debt-ridden Reliance Communications and new telecom operator Reliance Jio Wednesday met Telecom Secretary Aruna Sundararajan to resolve issues flagged by the Department of Telecom (DoT) around payment related to the spectrum sale deal between the two firms. According to sources, the DoT maintained its stance that the deal cannot be cleared unless it gets clarity on payment of dues and associated charges. Government sources aware of the development told PTI that Mukesh Ambani-led Jio has refused to take any payment liability of his younger brother’s firm RCom to complete spectrum trading deal between the two companies. The department has said that under the present circumstance when both the parties are not in position to take the responsibility of payment of dues, the telecom department cannot take the deal on record.
“The Supreme Court had asked us to accept guarantees being given by RCom. We have complied to the court order but as per spectrum trading rule, DoT has right to recover dues. After Reliance Jio letter denying to take past liabilities of RCom, DoT is not in position to take the the spectrum trading between them on record. The same has been conveyed to RCom,” an official source said. RCom has offered the DoT corporate guarantee of Rs 1,400 crore issued by Reliance Realty Limited (RRL) and an undertaking from RRL not to alienate property for a value of Rs 1,400 crore for approving sale of its spectrum to Reliance Jio. Reliance Jio said acknowledged receipt of correspondence from the department and added that it is “seeking appropriate clarifications in this regard”.
Ericsson and RITL have filed insolvency plea against RCom for failure to clear their dues. RCom has promised to clear the dues once its spectrum sale to Jio is completed. Last year, RCom signed a pact with Reliance Jio for the sale of wireless spectrum, tower, fibre and media convergence nodes assets – the proceeds of which were to be used to pare debt. From that deal, RCom so far announced the completion of the sale of optical fibre assets worth Rs 3,000 crore and sale of its media convergence nodes worth Rs 2,000 crore to Mukesh Ambani-led Reliance Jio Infocomm.
RCom expects to get Rs 975 crore from sale of spectrum which it has promised to pay due of Rs 550 crore to Ericsson and Rs 230 crore to settle dues of minority stakeholder Reliance Infratel. Meanwhile, National Company Law Appellate Tribunal (NCLAT) has put on hold insolvency proceedings against RCom after promise made by the company. NCLAT has adjourned the hearing to January 22 in the matter of Ericsson petition and RITL minority investors’ related settlement petition. Total debt on RCom is estimated to be around Rs 46,000 crore.