The Supreme Court allowed Reliance Communications (RCom) to go ahead with the sale of its wireless assets to Reliance Jio Infocomm.
The Supreme Court on Thursday allowed Reliance Communications (RCom) to go ahead with the sale of its wireless assets to Reliance Jio Infocomm as it set aside the Bombay High Court’s March order that upheld an arbitration tribunal’s interim order barring the sale or transfer of its assets. As of now, the apex court has allowed creditors to proceed with the sale of spectrum, media convergence nodes (MCNs) and real estate that were subject matter of the dispute before the arbitral tribunal. However, with regard to the sale of tower subsidiary Reliance Infratel where the National Company Law Tribunal had earlier stayed the sale on the petition of HSBC Daisy Investments (Mauritius) which has a minority 4% stake in the tower firm, the SC said that the company needs to appeal in the National Company Law Appellate Tribunal for relief. Only if it is not satisfied with its ruling can it approach the apex court. This means that if RCom wants it can go ahead with the sale of spectrum, MCN and real estate right away but for the sale of Infratel it will first have to first seek the nod of the NCLAT. The company will file an appeal in the NCLAT on Friday. In a statement following the SC order, RCom said, “The Hon’ble Supreme Court has today lifted the stay granted in favour of Ericsson by the Bombay High Court, in relation to asset sales by RCOM. The Hon’ble SC has directed that secured lenders can proceed with the asset sales in accordance with law.
Accordingly, there is now no bar in immediately completing the asset sales of spectrum, MCNs and real estate, and the same shall be concluded expeditiously.” It added, “On the stay granted by NCLT in favour of minority investors holding approximately 4% shareholding in Reliance Infratel, which is limited to tower and fibre assets, the Hon’ble SC has not made any comments on merits, and has instead only directed RCOM and its lenders to follow due procedure, and file an appeal before the NCLAT, instead of directly approaching the Hon’ble SC. As legally advised, and based on the order of the Hon’ble SC as above, RCOM is confident of securing appropriate relief from the NCLAT to enable sales of tower and fibre assets to also be completed at the earliest. The claim of the minority investors (which is fully disputed by RCOM) can, in any case, be a maximum of approximately Rs 200-300 crore from the sales proceeds. RCOM intends filing the aforesaid appeal before NCLAT tomorrow, with a request for expeditious disposal of the same.” The company said that based on these developments, it is now confident of achieving overall debt reduction of approximately Rs 25,000 crore within the next few weeks, from the first phase of the asset monetisation programme. Reliance Jio has emerged as the highest bidder for RCom’s assets.