RCom, Reliance Jio extend validity of asset sale pact to June 28
31 December 2018
Reliance Communications and Reliance Jio have extended the terms of an agreement for sale of wireless assets of the Anil Ambani-owned firm after the Telecom department refused to clear Rcom’s spectrum sale to Reliance Jio.
“Reliance Jio lnfocomm Ltd, a subsidiary of Reliance Industries Ltd, extended the term of the definitive agreement for the acquisition of specified assets of Reliance Communications Ltd and its affiliates to 28th June 2019,” Reliance Industries said in a regulatory filing today.
The acquisition is subject to receipt of requisite approvals from governmental and regulatory authorities, consents from all lenders, release of all encumbrances on the said assets and other conditions, it said.
In a separate filing, Reliance Communications said the company and Reliance Jio have “extended the validity of the agreements signed on 28th December 2017 for sale of towers, fibre, MCNs and spectrum of RCOM and its affiliates to 28th June 2019”.
“The transactions are to be consummated subject to various approvals that are currently in progress,” RCom added.
Reliance Communications has been urging the telecom department to grant it the “long-awaited no-objection certificate” to comply with a Supreme Court order in “letter and spirit”.
Senior officials of Reliance Communications and Reliance Jio had also met the telecom secretary this month to discuss outstanding issues raised by the Department of Telecom (DoT) over payment related to spectrum sale deal between the two companies.
The Anil Ambani-owned company had maintained that it remains committed to discharging any outstanding or disputed amount subject to final adjudication.
Reliance Communications had earlier asserted that the requirement of giving bank guarantee according to DoT’s demand has been substituted by the orders of the telecom tribunal and the Supreme Court, and that its unit Reliance Realty had provided a non-disposal undertaking and corporate guarantee.
“Hence, compliance with the trading guidelines is met,” RCom had asserted in an earlier statement.
However, DoT has, so far, held to its position that the deal cannot be cleared unless there is clarity on payment of dues and associated charges, particularly as the Mukesh Ambani-led Jio has refused to take any payment liability of RCom.
Reports, meanwhile, said Reliance Jio Infocomm subscribers could face disruptions in services in key markets such as Delhi, Maharashtra and West Bengal if it fails to buy spectrum from Reliance Communications and the Anil Ambani-owned telco gets pushed into insolvency.
This is because the Mukesh Ambani-led telco is dependent on RCom to create contiguous spectrum blocks of five units in the premium 800 MHz band — the bare minimum spectrum requirement for 4G LTE services — in the key markets, which also include Andhra Pradesh, Karnataka, Tamil Nadu and Kerala. In each of these circles, Jio holds 3.8 units of 4G airwaves in the 800 MHz band, and is dependent on RCom’s spectrum in the same band for uninterrupted LTE coverage.