India’s Reliance Communications (RCom) said on Wednesday it expects to complete its asset sale to Reliance Jio Infocomm and Canada’s Brookfield in coming weeks, after the bankruptcy appeals court halted insolvency proceedings against the debt-laden company. The 181 billion-rupee ($2.7 billion) asset sale by businessman Anil Ambani-controlled RCom includes airwaves, fiber, mobile masts and real estate assets in Delhi and Chennai, the company said in a statement, as it aims to prune its debt pile. Telecom assets such as towers and airwaves will be sold to Jio, RCom has previously said. Brookfield is involved in a small real estate transaction with RCom, a source familiar with the matter told Reuters. An email from Reuters seeking comment was not answered by RCom outside of business hours, while Brookfield did not immediately respond to a request for comment.
Jio is the telecoms venture of Reliance Industries , controlled by Ambani’s elder brother and India’s richest man Mukesh Ambani. The asset sale follows a settlement with telecom gearmaker Ericsson for partial payment of dues owed by RCom to the Swedish company. An appeals tribunal in New Delhi on Wednesday put on hold insolvency proceedings against RCom as part of the settlement and asked it to pay Ericsson 5.5 billion rupees ($81.5 million) by the end of September. The National Company Law Appellate Tribunal (NCLAT) also asked RCom and Ericsson to file an affidavit by June 7 stating they will abide by the settlement. RCom had filed an appeal with the NCLAT after the National Company Law Tribunal earlier this month admitted an insolvency plea against the company filed by Ericsson.
Ericsson, which signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network, was seeking 11.55 billion rupees from the company and two of its subsidiaries. On Tuesday, RCom said its unit Reliance Infratel had reached a settlement with its minority shareholders in relation to the sale of its tower and fiber assets. With debt of 457.33 billion rupees at the end of March 2017, RCom is the most-leveraged listed telecoms carrier in India.
Like other Indian telecoms firms, RCom has been hit by a fierce price war over the last year, especially after the entry of Reliance Jio, which offered free voice and cut-price data plans. Once India’s second-biggest phone carrier, RCom shut down its mobile business late last year. Separately, RCom’s consolidated net loss widened to 198.27 billion rupees in the quarter to March, compared with a loss of 11.12 billion rupees a year ago, as the company provisioned for asset impairments. – Financial Express