Billionaire Anil Ambani’s Reliance Communications Ltd. has told India’s top court that its asset sale to Reliance Jio Infocomm Ltd. may not go through if approvals aren’t in place by mid-December, putting at risk planned debt repayments by the distressed company.
India’s government has moved the Supreme Court against allowing the sale unless it is given 29.4 billion rupees ($417 million) in bank guarantees from either company toward spectrum usage charges. The two-judge bench headed by Justice A.K. Sikri will next hear the case on Nov. 27.
Ambani agreed last year to sell RCom’s towers, spectrum and fiber assets to older brother Mukesh Ambani’s Reliance Jio for 173 billion rupees to fend off bankruptcy action by creditors. The brothers have since wrapped up smaller deals, including one involving transmission nodes, but RCom has been awaiting clearance from the department of telecom due to its pending dues. The company had about $7 billion in debt outstanding as of March 2018.
“If the spectrum sale is not approved, banks will also not get anything,” Kapil Sibal, a lawyer representing RCom, said in court said on Monday.
The wireless operator said it has given land valued at 140 billion rupees as security for the government’s dues and wasn’t in a position to provide bank guarantees. RCom shares have dropped 64 percent so far this year. – Bloomberg Quint