Relief for Reliance Communications as Supreme Court allows partial sale of RCom's assets

In a huge relief for debt-ridden Reliance Communications and its lenders, the Supreme Court on Thursday allowed the Anil Ambani-led firm to sell assets such as spectrum, fibre, real estate to Reliance Jio. The Supreme Court was hearing a petition by State Bank of India (SBI)-led lenders and RCom. The apex court said that RCom's secured creditors can go ahead with asset sales.

The apex court, however, asked the telecom operator to approach the NCLAT to get the stay on the sale of its telecom towers vacated. The stay bars RCom subsidiary Reliance Infratel from selling tower assets to Mukesh Ambani-led Jio.

In December 2017, the banks had initiated the asset sale through a bidding process. Jio had agreed to buy RCom spectrum, mobile towers and other infrastructure, including 1.78 lakh km of fibre optics line, for Rs 17,300 crore.

A consortium of banks led by the State Bank of India had approached the apex court challenging a tribunal's order barring the beleaguered RCom from selling or transfer of its consolidated assets without prior permission. The Bombay High Court had also upheld the lower court order on March 8.

Ericsson had earlier approached the tribunal against RCom's move to sell the assets to Jio on grounds that the telecom firm had not cleared arrears of Rs 1,012 crore to the Swedish telecom equipment manufacturer. Ericsson had signed a seven-year contract in 2014 to operate and manage RCom's nationwide network. In September 2017, it had filed the insolvency petition to get its dues.

In its appeal, filed through advocate Sanjay Kapur, SBI had challenged the high court decision, saying an unsecured creditor (Ericsson) could not steal a march over secured creditors like SBI.

RCom had said it will reduce debt by about Rs 25,000 crore through the sale of some of its spectrum, tower and real estate assets.

RCom owns about 96 per cent stake in Reliance Infratel, while the remaining is held by George Soros' Quantum (M), NSR Partners, Galleon, HSBC Daisy Investment ( Mauritius), Drawbridge Towers, Investment Partners B (Mauritius).