Mukesh Ambani’s Reliance Jio Infocomm had agreed to buy spectrum, towers and other wireless infrastructure of his younger brother
BS: In a major blow for Anil Ambani’s Reliance Communication, the department of telecommunication (DoT) on Tuesday refused to give a clearance to RCom-Reliance Jio Infocomm deal. As part of debt reduction efforts, Anil Ambani-led RCom had, in December 2017, signed a Rs 250-billion deal with elder brother Mukesh Ambani‘s Reliance Jio. The deal included the sale of assets mortgaged with different banks to avoid insolvency proceedings. The company expected 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.
Earlier, the apex court had asked RCom to furnish a corporate guarantee of Rs 14 billion within 2 days, following which DoT had to give it a No Objection Certificate (NOC) for the RCom-RJio spectrum sale deal within 7 days. All went as planned. RCom furnished the guarantee amount and the DoT agreed to give RCom the green signal.
Big brother’s letter gets Anil into trouble
On Friday, DoT had told the Supreme Court that it was ready to provide the company a NOC for spectrum and asset sale to Jio. However, by Tuesday, the DoT reversed its stand following Jio’s letter wherein it sought assurances from the government that it won’t be held liable for RCom’s past dues related to airwaves, reports Economic Times.
In a letter to the DoT, RJio stated that although RCom has offered a corporate guarantee of Rs 14 billion towards settling its dues, the licence conditions stipulate that it should also give a bank guarantee.Jio’s conditions, mentioned in the letter to the government, are not in accordance with spectrum trading norms, according to which, the buyer is liable for dues that haven’t been recovered from the seller.
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