Creditors and vendors of RCom on Monday heaved sigh of relief after the Anil Ambani’s RCom submitted a corporate guarantee of Rs 1,400 crore to the Department of Telecom inching towards closure of the spectrum sale with Reliance Jio and also ensuring their repayments.
The Supreme Court, on November 30, ordered the DoT to grant a no-objection to Reliance Communications for spectrum trading within 7 days. The court had upheld the earlier order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and said no bank guarantee is now required.
“As per the order dated November 30 of the Supreme Court, Reliance Realty, a 100 per cent subsidiary of RCom has submitted the Corporate Guarantee of Rs 1,400 crore to the Department of Telecommunications (DoT). As per the said Order, DoT is to approve the Spectrum Trading within this week. The Spectrum Trading transaction will now be completed and proceeds will clear the dues of Ericsson and minority investors of Reliance Infratel. RCom’s Asset Monetisation proceeds as per plan,” a RCom statement said.
The statement also said that the proceeds from the spectrum deal will be used to clear the dues of Ericsson and Reliance Infratel minority investors, and added that Reliance Communications’ asset monetisation blueprint is moving as per plan.
Late last week, a bench headed by Justice RF Nariman said that the NoC would be given to RCom, a Anil Ambani group firm, by the Telecom Department, if Reliance Realty furnishes the corporate guarantee within two days.
The order came on a petition filed by the Telecom Department against the order of Telecom Disputes Settlement and Appellate Tribunal which had allowed RCom to sell spectrum to Reliance Jio without providing the bank guarantee of around Rs 2,900 crore to the DoT.
The TDSAT, in its last month order, had rejected DoT’s plea seeking bank guarantee of around Rs 2,900 crore before it permits sale of RCom spectrum to Reliance Jio.
RCom has signed an agreement with Mukesh Ambani-owned Reliance Jio Infocomm to sell its spectrum and other telecom assets for an estimated Rs 25,000 crore and partially clear its debt of about Rs 46,000 crore. The company had shut its wireless business last year, weighed down by Rs 46,000 crore of debt, falling revenue and widening losses. The company has been locked in a legal tussle with DoT over spectrum-related dues worth Rs 2,947.68 crore.
The DoT had refused to clear the spectrum sale until its dues were covered by bank guarantees and it had challenged a pledge of land to cover the amount.
RCom has been banking on sale of assets to repay Ericsson and Reliance Infratel shareholders, besides 39 lenders, including 14 state-run banks led by State Bank of India. The Supreme Court had set a December 15 deadline for RCom to pay Rs 975 crore to Ericsson (Rs 550 crore plus interest) and Reliance Infratel’s minority shareholders, including HSBC Daisy Investments.