SC asks RCom for Rs 14-bn guarantee, clears path for spectrum sale to Jio
Clearing the deck for sale of Reliance Communications Ltd's spectrum to Reliance Jio Infocomm Ltd, the Supreme Court on Friday asked Reliance Communications to furnish a corporate guarantee of Rs 14 billion within two days to get the No Objection Certificate (NOC) from the government.
The corporate guarantee will be issued by Reliance Realty Ltd, a wholly-owned subsidiary of RCom.
Once the corporate gurantee is furnished by RCom, the government will have to give its NOC for the spectrum sale within one week.
The order by the Supreme Court comes in wake of the Department of Telecommunications (DoT) challenging the Telecom Disputes and Settlement Appellate Tribunal's (TDSAT) October 1 permission to debt-ridden RCom to sell its spectrum to Reliance Jio.
In its petition before the top court, the DoT had remained firm on its stand that it would require a bank gurantee of nearly Rs 29 billion from RCom or RJio before it could allow spectrum sale.
As part of debt reductions efforts, Anil Ambani-led RCom had, in December 2017, signed a Rs 250-billion deal with elder brother Mukesh Ambani's Reliance Jio. The deal included sale of assets mortgaged with different banks to avoid insolvency proceedings. The company expects to raise Rs 180 billion from sales of its wireless assets to Reliance Jio and real estate assets to Canada's Brookfield, and pare some of its Rs 460 billion debt.
On Monday, RCom had told the Supreme Court that its asset sale to Reliance Jio may not go through if approvals aren't in place by mid-December, putting at risk planned debt repayments by the distressed company.