Court clears way for R-Com to sell spectrum

Court clears way for R-Com to sell spectrum

The asset monetisation plan of Reliance Communications got a major boost when the Supreme Court on Friday asked the company to submit a corporate guarantee of Rs 1,400 crore to the department of telecommunications (DoT).

The Anil Ambani-company can now proceed with the sale of spectrum to Reliance Jio Infocomm (Jio).

The company will use the proceeds of this spectrum sale to pay off Ericsson and the minority investors of Reliance Infratel Ltd (RITL).

Shares of R-Com zoomed following the order by the apex court. On the BSE, the scrip ended nearly 12 per cent higher at Rs 14.27.

A statement from R-Com said the Supreme Court on Friday ordered the DoT to grant a no-objection within seven days to the company for spectrum trading.

R-Com’s 100 per cent subsidiary, Reliance Realty, will submit a corporate guarantee (which is backed by properties) of Rs 1,400 crore within two days to the DoT, the company added.

The DoT has been insisting R-Com furnishes a bank guarantee for spectrum use charges, while the latter has maintained it will not be able to provide one because of insolvency proceedings against the company.

Earlier, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had rejected the government’s plea for bank guarantees, which led to the DoT approaching the Supreme Court.

R-Com added that the apex court on Friday upheld the earlier order of the TDSAT and no bank guarantee is now required.

“The spectrum trading transaction will now be completed and R-Com will pay-off Ericsson and minority investors of RITL. R-Com’s asset monetisation programme thus proceeds according to plan,’’ it said.

In addition to the proposed sale of spectrum, R-Com is looking to sell an additional 65MHz spectrum in the 800MHz band to Reliance Jio for Rs 3,750 crore, which will bring down its debt further.

R-Com, which posted consolidated revenues of Rs 1,014 crore for the September quarter, expects to close the ongoing debt resolution in the current financial year.