RCom set to exit debt rejig with Rs13,000 cr from RJio

Debt-laden Reliance Communications (RCom) expects to completely exit the debt-restructuring process with the receipt of the final tranche of Rs13,000 crore from Reliance Jio Infocomm (RJio) as payment for its infrastructure network that Jio has acquired. 

RCom will receive only Rs975 crore of the amount while Rs12,025 crore will be paid to 38 secured lenders, including a clutch of public and private sector banks. The Anil Ambani group company will have to further share the Rs975 crore with Swedish telecom equipment-maker Ericsson (RS550 crore) and HSBC Daisy Investments-Mauritius (Rs230 crore).
RCom has already received Rs5,000 crore in two tranches from RJio, a wholly-owned subsidiary of Reliance Industries headed by Anil Ambani’s elder brother Mukesh Ambani.
With the final tranche of Rs13,000 crore payment from Reliance Jio in the next 7-10 days, RCom will now be able to complete spectrum trading without the bank guarantee of Rs2,900-crore sought by the Department of Telecommunications (DoT).
RCom also on Monday received an interim stay from the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on the bank guarantee demand.
Ericsson, which had signed a seven-year deal in 2014 to operate and manage RCom’s nationwide network, had moved Supreme Court, but later a settlement between RCom and Ericsson’s India unit and asked the Anil Ambani-led firm to pay the dues by September 30. 
With the deadline not met, and RCom seeking a 60-day extension, Ericsson moved the Supreme Court with a contempt-of-court petition last week. The case is coming up for hearing tomorrow.
A separate case filed before National Company Law Appellate Tribunal (NCLAT) on the Ericsson issue, which came up for hearing on Wednesday, has been adjourned. RCom’s final settlement with RJio will be subject to the outcome of both these cases.
HSBC Daisy is a minority investor in Reliance Infratel (RITL) and the company which earlier opposed the sale, later signed a consent deal with RCom on 15 June  2018.
RCom offloaded its stake first in the tower business, followed by the India fibre telecom infrastructure and spectrum in the 850 MHz, 900 MHz, 1800 MHz and 2100 MHz.
RCom lenders include public sector State Bank of India, Punjab National Bank, IDBI Bank and Bank of Baroda, and private lenders Yes Bank, Standard Chartered Bank, HDFC Bank, IFCI and Deutsche Bank among others.