Reliance Communications, through its subsidiary Reliance Realty, has furnished a corporate guarantee of Rs 1,400 crore to Department of Telecommunications (DoT), which will clear the last hurdle of its spectrum sale deal with Reliance Jio.
Last week, the Supreme Court asked DoT to give a no-objection certificate (NoC) to Reliance Communications to sell its spectrum to Reliance Jio provided a corporate guarantee of the said amount is furnished by its group firm in favour of government.
The proceeds from the spectrum deal will be used to clear the dues of Ericsson and RITL (Reliance Infratel) minority investors. Reliance Communications' asset monetisation blueprint is moving as per plan, the company said.
"As per the order....of the Supreme Court of India, Reliance Realty Limited, a 100% subsidiary of RCom, has submitted the corporate guarantee of Rs 1,400 crore to the DoT. As per the said order, DoT is to approve the spectrum trading within this week," RCom spokesperson said in a statement on Monday.
The order from SC came on a petition filed by the Department of Telecommunications against the order of Telecom Disputes Settlement and Appellate Tribunal (TDSAT) which had allowed RCom to sell spectrum to Reliance Jio without providing the bank guarantee of around Rs 2,900 crore to the DoT. In November, TDSAT had rejected DoT's plea seeking a bank guarantee of around Rs 2,900 crore before it permits the sale of RCom spectrum to Reliance Jio.
Late last week, a bench headed by Justice R F Nariman said the NoC would be given to Reliance Communications Ltd (RCom), an Anil Ambani group firm, by the Telecom Department, if Reliance Realty furnishes the corporate guarantee within two days.
RCom had shut its wireless business due to hyper competition in the telecom sector. RCom has signed an agreement with Mukesh Ambani-owned Reliance Jio Infocomm Ltd to sell its spectrum and other telecom assets for an estimated Rs 25,000 crore and partially clear its debt of about Rs 46,000 crore.
RCom has been banking on the sale of its assets to repay Ericsson and Reliance Infratel shareholders, besides 39 lenders, including 14 state-run banks led by State Bank of India. Supreme Court had set a December 15 deadline for RCom to pay Rs 975 crore to Ericsson (Rs 550 crore plus interest) and Reliance Infratel's minority shareholders, including HSBC Daisy Investments.
DEBT CALL
- Rs 25,000 crore – RCom asset sale planned to RJio
- Rs 46,000 crore – Debt of RCom
- Rs 550 crore – Rcom has to pay to Ericsson
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The order from SC came on a petition filed by the Department of Telecommunications against the order of Telecom Disputes Settlement and Appellate Tribunal (TDSAT) which had allowed RCom to sell spectrum to Reliance Jio without providing the bank guarantee of around Rs 2,900 crore to the DoT. In November, TDSAT had rejected DoT's plea seeking a bank guarantee of around Rs 2,900 crore before it permits the sale of RCom spectrum to Reliance Jio.
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