SC permits RCOM to sell Rs.25000 Crore assets to JIO

supreme courtThe Supreme Court has offered a huge relief to Anil Ambani’s Reliance Communications on Friday, after which the company can sell its assets worth Rs.25000 crore to Mukesh Ambani’s Reliance Jio Infocomm. The move will bring down the RCOM’s overall debt of Rs.45000 crore by Rs.25000 crore by selling its assets like telecom towers, spectrum, and optical fibre under monetisation programme to Reliance Jio.

Bench of two apex court judges said that Rcom would have to pay Rs.5.5 billion to Swedish firm Ericsson by October 1 and Chairman Anil Ambani would have to give an undertaking that the company would pay off the debt before the deadline.

The settlement terms arrived between Ericsson and Rcom for Rs.1500 crore to Rs.550 crore. Swedish company had supplied equipment to Reliance but was not paid. Later in May 2018, Ericsson moved to the National Company Law Tribunal (NCLT), Mumbai, seeking payment for the dues. The NCLT initiated bankruptcy proceedings against RCom and passed the orders to the company to clear off dues of Rs.5.5 billion to Ericsson by the end of September.

Consequently, Rcom moved to the NCLAT (National Company Law Appellate Tribunal) which passed stay to the insolvency proceedings, though, ordered the company to pay the dues by the end of September. The NCLAT had warned that if the payment is not done before the due date, the entire sale of assets would be reversed. RCom then moved a special leave petition to the Supreme Court.

After the orders passed by the Supreme Court, Rcom will sell its assets by August 27 deadline imposed by the RBI. The sell of assets would bring down Rcom’s debt by Rs.250 billion including Rs.70 billion in deferred spectrum payment liabilities, a legal source said.

The spectrum liabilities will now get transferred to Jio, as it will be the new owner of the spectrum.

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