Thank God it’s Friday: A day of hope for Anil Ambani
Friday brought a ray of hope for Anil Ambani, the beleaguered chairman of the debt-ridden Reliance Group. In two separate cases in the Supreme court, Ambani got major relief. His company RComNSE 2.27 % was once again on the verge of entering bankruptcy while he was embroiled in a political slugfest between the government and the Congress party over the Rafale fighter jet deal.
The Supreme Court today dismissed all pleas to probe the Rafale deal. The opposition parties had accused Prime Minister Narendra Modi of corruption by favouring Anil Ambani’s company Reliance Defence with offset contract. In a statement, Ambani welcomed the judgment. He said dismissal of various petitions seeking probe into the deal conclusively established the complete falsity of the wild, baseless and politically motivated allegations levelled against Reliance Group and him personally.
Another court-related event came as a relief for Ambani’s RCom. The telecom department today informed the Supreme Court that it would give its nod to RCom’s spectrum sale by Monday morning. It is a relief to the telco which can go ahead with its asset sale and pay off its lenders and creditors .
The Department of Telecommunications (DoT) on Friday told the apex court that it was conducting its due diligence on the corporate guarantee of Rs 1400 crore provided by Reliance Realty-unit of RCom against spectrum dues. The corporate guarantee and a plot of land were provided as security against spectrum-related dues worth Rs 2,947.68 crore.
The legal battle between DoT and RCom over dues has been on for a few months now. The SC in a previous order had directed DoT to grant RCom approval within seven days of receiving the corporate guarantee and when that deadline lapsed, RCom filed a contempt case against DoT. For RCom this approval was crucial because it is close to missing its payment deadline of December 15 to Ericsson. This week it had even asked for extended timeline which was refused by SC on Thursday.
Now once the no-objection certificate comes in from DoT, RCom is expected to complete its asset sale to Reliance Jio Infocomm (Jio) and Brookfield and pay Swedish telecom gear maker Ericsson as well, soon after.
Ericsson’s lawyers had told ET earlier that if payment of Rs 550 crore was not made within the scheduled date , the contempt petition and insolvency order would be listed when court reopened in January after the winter break.
Reeling under a debt of Rs 46,000 crore, RCom is desperately awaiting DoT’s nod for spectrum sale, post which the company will complete its asset monetisation plan with Reliance Jio Infocomm (Jio) and Canadian asset management firm Brookfield for Rs 18,000 crore.
The company, which was forced to shut its wireless operations late 2017 facing huge debt, falling revenue and widening losses, has completed the sale of fibre assets and switching nodes to Jio for Rs 5,000 crore, while spectrum and tower assets to the new telecom entrant are still pending and some land parcels need to be sold to Brookfield.