MUMBAI: In a breather, the Supreme Court (SC) on Friday allowed Reliance Jio Infocomm and Reliance Communications Ltd (RCom) to proceed with sale of the latter’s telecom assets to the former as planned.
However, uncertainty prevails over RCom’s payments to Ercisson India, which moved the apex court on Thursday.
According to sources, RCom tried settling its dues with Ericsson India, its operational creditor, with bank guarantees, but the telecom gear-maker rejected the offer, instead preferring repayment of its dues in cash.
The SC instructed that RCom pay Ericsson India a settlement amount before October 1, when it hears the matter again.
RCom owes the lenders consortium, led by SBI, over Rs 42,000 crore and offered that the sale process will help them recover about Rs 18,000 crore. Lenders may have to fork out Rs 550 crore as settlement offer to Ericsson India from the proceeds they receive through the Jio deal, which the consortium is reportedly uncomfortable with. It remains to be seen how the trio – banks, RCom and Ericsson — will resolve the issue, which stalled the sale process.
In May 30, the NCLAT stayed Ericsson India’s insolvency proceedings against RCom till September 30 on condition that its dues will be repaid. It allowed bankers to continue with the asset monetisation programme, which has been initiated before the insolvency process began.
Subsequently, in December 2017, RCom announced the deal with Jio to sell all of its telecom assets, including spectrum, telecom towers business and its land parcel. All could have gone well, but for Ericsson India and Tech Mahindra Ltd, both of which halted the insolvency proceedings against RCom. Though Tech Mahindra withdrew its plea later, Ericsson India pursued the matter, which forced the NCLT to appoint an interim resolution professional. RCom moved the NCLAT to get the insolvency proceedings quashed, saying it could impact recovery.
Unsettled dues
■ RCom tried settling its dues with Ericsson India, its operational creditor, with bank guarantees
■ Ericsson rejected the offer, preferring repayment of its dues in cash
■ The Supreme Court instructed that RCom pay Ericsson India a settlement amount before October 1