Anil Ambani’s Reliance Communications (RCom) must repay Rs. 550 crore in dues to Swedish telecom equipment giant Ericsson by December 15, the Supreme Court said on Tuesday, refusing to grant any extension. RCom has been directed to return the money at an interest rate of 12 per cent from September 30. RCom was to pay Ericsson by September 30 but failed to meet the deadline, the court noted.
Ericsson had requested the top court to stop Anil Ambani and two senior executives of his company from leaving the country, alleging that the company had wilfully defaulted on the payment of Rs. 550 crore. Ericsson had also asked the court not to allow RCom to sell its mobile business assets.
RCom said it could repay the money only after the Department of Telecom (DoT) approved the sale of its assets. “DoT approval is beyond our control, spectrum sale is stuck on account of DoT nod,” the debt-laden company told the court.
A no objection certificate is required from the telecom department for the sale of spectrum, said RCom, adding that it will repay the dues to Ericsson within seven days of approval.
Ericsson argued that RCom had already received over Rs. 5,000 crore from the sale of its assets. “It is raising the bogey of (did you mean “of”) DoT (Department of Telecom) nod to cause delays. RCom is taking the Supreme Court and Ericsson for a ride,” the Swedish company said.
The stock of RCom closed flat at Rs. 10.87, down Rs. 0.03 or 0.28 per cent on the BSE, whose benchmark index Sensex finished 287.15 points or 0.84 per cent lower, at 33,847.23, extending its losses for a fourth consecutive session.
Ericsson had signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network. After RCom failed to pay for supplies provided, Ericsson initiated insolvency proceedings against Mr Ambani’s companies before the National Company Law Tribunal (NCLT) to recover Rs. 1,150 crore. The dues have now increased to Rs. 1,600 crore.
RCom had also petitioned the Supreme Court to cancel insolvency proceedings against it and two other subsidiaries. Ericsson India urged the Supreme Court not to do so until Anil Ambani’s company paid Rs. 500 crore as agreed.
RCom owes over Rs. 40,000 crore in debt to a group of 38 lenders, including Chinese banks. In September, the cash-strapped company announced that it would completely exit the telecom business to concentrate on real estate. In August it said that it had completed the sale of its media convergence nodes and related infrastructure assets worth Rs. 2,000 crore ($285.4 million) to Reliance Jio Infocomm, which is owned by Anil Ambani’s brother Mukesh Ambani. – NDTV