RCom will now be able to reinstate bank guarantees encashed by DoT earlier this year.
Anil Ambani’s Reliance Communications on Friday got a huge relief from the Supreme Court, which cleared its asset sale to Reliance Jio Infocomm. The move paves the way for the completion of the company’s asset monetisation programme under which RCom will sell its assets like spectrum, telecom towers and optical fibre to Jio. This will bring down the company’s overall debt of Rs 45,000 crore by Rs 25,000 crore.
The Rs 25,000 crore which RCom will receive from Jio includes around Rs 18,000 crore in cash and another Rs 7,000 crore towards deferred spectrum liabilities, which will get transferred to Reliance Jio, as the new owner of the spectrum.
The payment by Jio will also enable RCom to reinstate the bank guarantees that were encashed by the department of telecommunications earlier this year on account of deferred payment liabilities.
In the next phase, the company plans to raise around Rs 3,700 crore by selling its remaining 850 MHz spectrum assets to Jio. It also plans to monetise its 133-acre Dhirubhai Ambani Knowledge City campus in Navi Mumbai and its 4-acre property in New Delhi to raise around Rs 10,000 crore.
While approving the RCom’s proposal for settlement of dispute with telecom equipment manufacturer Ericsson India, a bench led by justice RF Nariman said as per the National Company Law Appellate Tribunal’s May 30 order, it is clear that Ericsson India, an operational creditor, is willing to settle its debt of over Rs 1,500 crore for Rs 550 crore which is to be paid within 120 days i.e. by September 30.
“Needless to say, the sale of assets concerned will go through as has been stated in the NCLT and NCLAT orders,” the apex court said while asking RCom to strictly adhere to the timeline for payment of Rs 550 crore to be made on or before September 30. It also directed chairman Anil Ambani to give an undertaking within one week to pay to Ericsson as per the settlement arrived at.
The matter has been posted for further hearing on October 1, when the court will decide on the insolvency issue.
The NCLAT had on May 30 ordered that the insolvency plea by Ericsson India against RCom would be put on hold, in favour of a settlement plan being discussed between the two.
RCom had requested the SC to give effect to the mutual settlement so as to ensure certainty of the sale process and its irreversibility and immunity from any further challenges.
The NCLT had on May 15 admitted the insolvency petition filed by Ericsson in lieu of recovering pending dues of Rs 1,150 crore.
However, RCom amicably settled the dispute with it by offering Rs 500 crore before the tribunal in May.
Ericsson had signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network. After RCom failed to pay for its supplies procured from Ericsson, the latter initiated insolvency proceedings against before the NCLT to recover Rs 1,150 crore.