SC clears Rcomm's sale of mobile business to Jio
05 April 2018
Paving the way for Reliance Communications' (RCom) proposed sale of its wireless assets to Reliance Jio Infocomm, the Supreme Court on Thursday lifted a stay granted in favour of Ericsson by the Bombay High Court.
The court also said that the 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, RCom said in a BSE filing.
Ericsson India, which had seven-year contract to operate and manage RCom's nationwide network, had filed an insolvency petition against the Anil Ambani-led telecom company over nonpayment of fees. Ericsson India, the Indian arm of Swedish networking giant Ericsson, had in 2014 signed a deal to operate and manage Reliance Communications' nationwide network, but alleged the latter of failing to meet contractual payments.
In March, Ericsson India filed insolvency petitions against RCom and two of its subsidiaries, Reliance Infratel and Reliance Telecom, over total unpaid dues of Rs1,150 crore. Following the petition, the company secured a stay order from the Bombay High Court.
Separately, on a stay granted by the National Company Law Tribunal (NCLT) in favour of minority investors with about 4-per cent shareholding in Reliance Infratel, the Supreme Court directed RCom and its lenders to file an application before the appellate tribunal.
The Supreme Court has "directed RCOM and its lenders to follow due procedure, and file an appeal before the NCLAT, instead of directly approaching SC," RCom's statement said.
"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 about Rs200-300 crore from the sales proceeds. RCom intends filing the aforesaid appeal before NCLAT tomorrow, with a request for expeditious disposal of the same," it said.
"Based on these developments, RCom is now confident of achieving overall debt reduction of about Rs 25,000 crore within the next few weeks, from the first phase of the asset monetisation programme as detailed in the media release issued on December 26, 2017," it added.