SC allows partial sale of Reliance Communication Assets to Jio

Team SoOLEGAL 6 Apr 2018 2:11pm

SC allows partial sale of Reliance Communication Assets to Jio

New Delhi: In a much needed relief for debt-ridden Reliance Communications and its lenders, a two Judge Supreme Court bench led by Justice AK Goel on Thursday allowed the Anil Ambani-led Reliance Communication to sell assets such as spectrum and 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. However, the court said for selling fibre optics and tower assets the company will have to take permission from National Company Law Appellate Tribunal(NCLAT).

Reliance Communication reportedly has  Rs25,000 crore worth debt on its books. It was represented by senior lawyer Mukul Rohtagi in the case.

In December 2017, a consortium of banks led by SBI had initiated recovery process by selling asset 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. However the whole process was thwarted as Ericsson,a Swedish telecom Equipment maker filed an application with arbitrator asking RCom to pay an arrear of Rs 1012 crore before it initiated asset sale. It said it feared non payment of dues in case asset sale happens. It was opposed by the Company and lenders but Arbitrator granted stay in favour of Ericsson. Against this order RCom filed an appeal in Mumbai High Court.Here too the company did not get relief as HC upheld the order given by Arbitrator. Then the company approached SC but in its hearing, the company plea was deferrred. However in the next hearing which was held yesterday, the court granted relief and allowed partial sale.

Rcom said it will file separate application with NCLAT for allowing it sale of fibre optics and tower assets.

Tagged: Rcom   SC   JIO   Ericsson  
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