Clearing the deck for the 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 a No Objection Certificate (NOC) from the government.
The said corporate guarantee will be issued by Reliance Realty Ltd, a wholly-owned subsidiary of RCom, senior lawyer Kapil Sibal, appearing for RCom told the court.
Once the corporate guarantee is furnished by RCom, the government will have to give its NOC for the spectrum sale within one week that is December 9, a two-judge bench of Justice Rohinton Fali Nariman and Justice Navin Sinha said.
The order by the top court comes in the wake of 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 RJio.
In its petition before the top court, the DoT had remained firm on its stand that it would require a bank guarantee of nearly Rs 29 billion from RCom or RJio before it could allow spectrum sale. RCom, on the other hand, had repeatedly expressed its inability to furnish a bank guarantee as the company was undergoing insolvency proceedings.
On Monday, the company had told the apex court that its asset sale to RJio could be jeopardized if the necessary approvals were not in place by mid-December, which would further put at risk its debt repayment plans.
As part of debt reductions efforts, Anil Ambani-led RCom had, in December 2017, signed a Rs 250-billion deal with Mukesh Ambani's Reliance Jio. The deal included the 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 RJio and real estate assets to Canada's Brookfield, and pare some of its Rs 460 billion debt.
The said corporate guarantee will be issued by Reliance Realty Ltd, a wholly-owned subsidiary of RCom, senior lawyer Kapil Sibal, appearing for RCom told the court.
Once the corporate guarantee is furnished by RCom, the government will have to give its NOC for the spectrum sale within one week that is December 9, a two-judge bench of Justice Rohinton Fali Nariman and Justice Navin Sinha said.
The order by the top court comes in the wake of 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 RJio.
In its petition before the top court, the DoT had remained firm on its stand that it would require a bank guarantee of nearly Rs 29 billion from RCom or RJio before it could allow spectrum sale. RCom, on the other hand, had repeatedly expressed its inability to furnish a bank guarantee as the company was undergoing insolvency proceedings.
On Monday, the company had told the apex court that its asset sale to RJio could be jeopardized if the necessary approvals were not in place by mid-December, which would further put at risk its debt repayment plans.
As part of debt reductions efforts, Anil Ambani-led RCom had, in December 2017, signed a Rs 250-billion deal with Mukesh Ambani's Reliance Jio. The deal included the 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 RJio and real estate assets to Canada's Brookfield, and pare some of its Rs 460 billion debt.
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