SC orders Anil Ambani’s RCom to give guarantee of Rs 1,400 crore to government; share price jumps 15%

By: | Updated: November 30, 2018 2:50 PM

The Supreme Court today on Friday ordered Anil Ambani's Reliance Communications (RCom) to give a corporate guarantee of Rs 1,400 crore against Rs 2,900 crore demanded by the Department of Telecommunications (DoT).

SC asked Anil Ambani's RCom to give a corporate guarantee of Rs 1,400 crore after which the government will give them a no objection certificateSC asked Anil Ambani’s RCom to give a corporate guarantee of Rs 1,400 crore after which the government will give them a no objection certificate

The Supreme Court today on Friday ordered Anil Ambani’s Reliance Communications (RCom) to give a corporate guarantee of Rs 1,400 crore against Rs 2,900 crore demanded by the Department of Telecommunications (DoT) for clearing the deal with Mukesh Ambani’s Reliance Jio.

Reuters reported that the top court ordered the debt-laden telecom firm to give a corporate guarantee of Rs 1,400 crore after which the government will give them a no objection certificate to go ahead with the spectrum sale to Jio.

Soon after the SC order, RCom share price jumped 15% on the NSE, marking the biggest intraday gain since November 1. Shares of Reliance Communications Ltd surged 14.9% to Rs 14.65 per share. On the BSE, RCom shares surged 15.45% to a high of Rs 14.72 per share. Rcom stock is down nearly 65% this year as of its last close.

The court was hearing a petition by the DoT challenging the order by Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which had stayed the demand of bank guarantee of Rs 2,900 crore by the DoT.

Last year, RCom signed a deal Reliance Jio for sale of wireless spectrum, tower, fibre and media convergence nodes assets – the proceeds of which were to be used to clear Rs 45,000 crore debt. According to news agency PTI, so far, the company has completed the sale of optical fibre assets worth Rs 3,000 crore and sale of its media convergence nodes worth Rs 2,000 crore.

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