RCom replenishes Rs774 cr bank guarantees with DoT, escapes licence cancellation
13 Aug 2018
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Anil Ambani firm Reliance Communications (RCom) is reported to have replenished bank guarantees worth Rs774 crore with the Department of Telecommunications (DoT), much ahead of the deadline set by the telecom tribunal, saving itself from the prospect of its telecom licence getting cancelled.
Besides saving itself from the looming crisis, the replenishment of bank guarantees in lieu of spectrum payments will also clears the way for the asset monetisation plan of the debt-ridden company.
The telecom department had issued a show-cause notice on Reliance Communications as to why its spectrum and licence should not be cancelled after the debt-ridden telco stopped services.
“RCom and its subsidiary Reliance Telecom Limited have today reinstated bank guarantees aggregating Rs774 crore with the Department of Telecommunications (DoT), four weeks ahead of the last date of September 10, 2018, as granted by…Telecom Disputes Settlement and Appellate Tribunal (TDSAT),” RCom said in a statement, as reported by PTI.
The reinstatement of the bank guarantees will ensure that the company’s licence and spectrum value of Rs 11,300 crore “stands fully protected”, the statement said, adding RCom is fully compliant with the stipulated guidelines.
“The company’s asset monetisation programme of approx. Rs25,000 crore for sale of MCNs (media convergence nodes), tower, optic fibre and spectrum is fully on track, and will be completed expeditiously,” it said.
The first tranche of asset monetisation proceeds has been received last week, the statement said without divulging details. RCom had recently got a breather from the telecom tribunal on the licence and spectrum cancellation show-cause notice served by the DoT.
Rcom had moved theTelecom disputes Settlemt Appellate tribunal (TDSAT) to set aside and quash the show-cause notices dated 19 June 2018, and 22 June 2018, and “restrain” the telecom department from terminating or revoking the licences or revoking the spectrum held by the company.
RCom has entered into an agreement with Reliance Jio to sell spectrum and other telecom assets for an estimated about Rs17,000 crore and clear its debt partially.
RCom is currently under the debt resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC).
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