Mukesh Ambani’s Reliance Jio, Anil’s RCom extend validity of asset sale agreements

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Updated: Jan 01, 2019 7:04 AM

DoT has maintained that since Jio is not ready to take liability of RCom’s spectrum debt, it cannot let the deal go through.

Mukesh Ambani-led Jio has reportedly told DoT that it will not take any liability of RCom’s debt.

Reliance Communications (RCom) and Reliance Jio Infocomm have decided to extend the validity of the agreements signed by the two firms relating to sale of assets of the former to the latter till June 28, 2019.

“RCom and Reliance Jio Infocomm have extended the validity of the agreements signed on 28th December 2017 for sale of towers, fiber, MCNs and spectrum of RCom and its affiliates to 28th June 2019,” RCom said in a stock exchange filing on Monday.

The extension comes in the backdrop of the department of telecommunications (DoT) reportedly maintaining its stand to not clear the deal till there is clarity on the payment of dues relating to spectrum and other charges recoverable from RCom.

Following a recent Supreme Court order, Anil Ambani-owned RCom provided a corporate guarantee of Rs 1,400 crore to DoT against the company’s dues of Rs 2,900 crore relating to spectrum.

However, Mukesh Ambani-led Jio has reportedly told DoT that it will not take any liability of RCom’s debt.

DoT has maintained that since Jio is not ready to take liability of RCom’s spectrum debt, it cannot let the deal go through.

RCom has a total debt of around Rs 46,000 crore.

To pay off a part of its debt, RCom last year signed a deal with Jio to sell its assets including wireless spectrum, towers, optical fibre and media convergence nodes.

As of now, the sale of fibre optical assets and media convergence nodes have been completed with Jio paying Rs 5,000 crore in total to RCom.

The spectrum trading — wherein RCom would sell 122.4 MHz of airwaves to Jio — is likely to fetch RCom around Rs 975 crore of which it has promised to pay Ericsson Rs 550 crore and Rs 230 crore to settle other dues of its affiliate Reliance Infratel.

It was only after RCom promised to pay these dues that the National Company Law Appellate Tribunal put on hold insolvency proceedings against it after Ericsson and others filed a petition.

However, RCom has missed its deadline to pay Ericsson by December 15.

Shares of RCom on BSE fell 2.04% on Monday whereas that of Reliance Industries were down 0.42%.

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