Reliance Communications, which owes Ericsson ₹550 crore, has to clear the dues by 15 December, otherwise it will attract an interest of 12% per annum
New Delhi: The Supreme Court on Tuesday gave Reliance Communications Ltd (RCom) time till 15 December to clear the pending payment of ₹ 550 crore towards telecom equipment manufacturer Ericsson India Pvt. Ltd. Delayed payment will attract an interest of 12% per annum. A two judge bench headed by Justice Rohinton F. Nariman made it clear that this was the last time extension for RCom and that the amount must be paid on or before 15 December.
"You (Reliance) ask for a reasonable period, we will give you and after that its over", Nariman said.
Senior advocate Kapil Sibal said, “Jio has not given us a penny. We are waiting for DoT to give us NoC for the sale of assets. The moment DoT gives us the NoC, within a week we will pay."
This was opposed by senior advocate Dushyant Dave appearing for Ericsson who disuaded the court from accepting the DoT's argument.
"This bogey of DoT's approval is being raised to avoid paying money. They have already sold assets worth thousands of crore," Dave told the court.
The apex court was hearing a contempt plea by Ericsson for non-payment of ₹ 550 crore by RCom by the 30 September deadline.
RCom moved the top court on 19th March, seeking a stay on the orders by the Bombay high court and the Mumbai bench of the National Company Law Tribunal (NCLT), barring it from selling its wireless assets to Reliance Jio without the court’s prior approval. The company was joined as a co-petitioner by State Bank of India, which approached the court on 20th March, seeking approval for the sale of RCom’s assets to Reliance Jio.
The National Company Law Appellate Tribunal (NCLAT) had on 30 May stayed a corporate insolvency resolution process initiated against Anil Ambani-owned RCom and two group companies, Reliance Infratel and Reliance Telecom.
The NCLAT order came after Ericsson India, which had initiated the insolvency proceedings, accepted RCom’s offer to pay ₹ 550 crore by 30 September.
Ericsson had signed a seven-year deal with RCom in 2014 to operate and manage its nationwide telecom network. After alleged non-payment of dues since 2016, Ericsson moved the NCLT against RCom and group companies, Reliance Infratel and Reliance Telecom, in September 2017.
With the insolvency process being stayed, RCom can now go ahead with its ₹ 18,100 crore deal with Mukesh Ambani-led Reliance Jio Infocomm Ltd for the sale of its assets mortgaged with different banks to bring down debt.
Part of the deal with respect to the stay on sale of tower and fibre assets was cleared by the appellate tribunal on 29th May after Reliance Infratel’s offshore investors and minority shareholder HSBC Daisy Investments (Mauritius) Ltd decided to withdraw their objections to the sale.
A stay imposed by the Bombay high court on the sale of the other assets—spectrum, media convergence nodes and real estate (in New Delhi, Chennai, Kolkata, Jigni and Tirupati)—was vacated by the Supreme Court on 5th April.
RCom and its subsidiaries have a total outstanding debt of around ₹ 45,000 crore.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
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