SC approves RCom, Ericsson deal, R Jio to get telecom assets
04 August 2018
The Supreme Court has approved a settlement between Reliance Communications, owned by Anil Ambani, and the India unit of Swedish major Ericsson AB, paving the way for the sale of its telecom assets to Reliance Jio.
Reliance Communications can sell its telecom assets worth over Rs180 billion to Reliance Jio, controlled by Anil’s elder brother Mukesh Ambani. The transaction will see RCom’s debt reduce by half.
RCom has been asked to pay Rs5.5 billion to Ericsson by 1 October. The company will complete the sale of its assets by the Reserve Bank of India imposed deadline of August 27.
The National Company Law Appellate Tribunal (NCLAT) had in May put on hold the insolvency plea initiated by Ericsson India against RCom, following the discussion between the two companies for a mutual settlement.
It ordered RCom to pay Rs5.5 billion to Ericsson India against its claims within 120 days. It had also cleared the sale of RCom’s telecom assets by its lenders to Reliance Jio.
However, the insolvency procedures would resume if RCom was unable to clear Ericsson’s dues within the stipulated time frame. The company then approached the Supreme Court objecting to the NCLAT order.