Shares of Anil Ambani-controlled Reliance Communications surged in trade on Tuesday morning, after Asia’s richest man Mukesh Ambani bailed out the firm on Ericsson dues. RCom shares jumped 10% to Rs 4.40 to get locked on the upper circuit on NSE. “My sincere and heartfelt thanks to my respected elder brother, Mukesh and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support. I and my family are grateful we have moved beyond the past, and are deeply touched with this gesture,” Anil Ambani said in a statement.
Notably, Anil Ambani faced a possible jail term of three months, if his firm Reliance Communications failed to pay Ericsson by today, ie, 19 March 2019, according to a Supreme Court order. Anil Ambani’s statement suggests a possible bailout by elder brother Mukesh Ambani. Interestingly, the statement also confirmed that Reliance Communications has made a payment of Rs 550 crore and interest thereon to Ericsson, in compliance with the Supreme Court judgement.
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Recently, RCom called off the sale of its telecom assets to Mukesh Ambani-controlled Reliance Jio Infocomm, citing failure to get approvals from lenders and the government. The Supreme Court had ordered that Anil Ambani and two RCom directors pay Rs 450 crore within four weeks or face a three-month jail term for contempt of court.
Earlier in 2017, Ericsson had moved court under Insolvency and Bankruptcy Code against RCom alleging that the the telecom firm hasn’t paid it dues of nearly Rs 1,500 crore after signing a seven-year deal in 2013 to operate and manage its nationwide network. Following this, Ericsson had settled with RCom for a payment of Rs 550 crore in lieu of its outstanding dues, per a deal agreed upon before the Supreme Court.