Sistema Shyam Teleservices Ltd (SSTL), which used to operate under the MTS India brand, has informed the Indian’s Supreme Court that only Reliance Communication is liable to clear its adjusted gross revenue (AGR) dues.
RCom filed for insolvency in February 2019 after it failed to repay lenders. It had a debt of Rs 46,000 crore ($6.22 billion) at the time of filing for bankruptcy.
Anil Ambani-led RCom had acquired SSTL’s entire telecom business in October 2017 including licenses and spectrum in nine circles. SSTL had in return acquired a 10% stake RCom but exited India in 2018 after selling its entire stake in 2018 when the latter’s financial health deteriorated.
The comments came after the Supreme Court in its last AGR hearing asked for bankruptcy-related details of telcos such as Aircel, RCom, SSTL and Videocon within seven days. The court had said that it wanted to ensure that these companies were not misusing the insolvency laws to evade AGR liability.
SSTL, in an affidavit, informed the court that it had already complied with the AGR judgement by paying Rs 72.90 lakh as per its assessment of deficit AGR dues. These dues, it said, were not covered under the merger scheme with RCom in 2017.
As per the Department of Telecommunications, the combined AGR liability for RCom and SSTL stands at Rs 25,194.58 crore ($3.4 billion) as on March 6, of which Rs 222.1 crore ($30.01 million) belongs to the Indo-Russian telecom JV.
SSTL, a joint venture between Russia’s Sistema and India’s Shyam Group, said that there is no wilful default on the part of SSTL to comply with the court’s judgment. It added that while it paid Rs 72.90 lakh ($96,969) as per its assessment, the DoT didn’t respond to its several letters seeking clarification after the Supreme Court judgement in October 2019.
SSTL also said that all of its licenses were cancelled with immediate effect and all of its license-related liabilities were transferred to the respective licenses held by RCom after the DoT approved the merger scheme on October 31, 2017.
In 2017, RCom had acquired 2 million customers, and 30MHz of 800/850 MHz band spectrum from SSTL and subsequently extended the validity of its spectrum portfolio in the 800 and 850 MHz band in eight circles by a period of 12 years till 2033.
RCom had assumed the liability for SSTL’s spectrum amounting to Rs 390 crore ($52.7 million) per annum for the next eight years.
India’s insolvency court, the National Company Law Tribunal (NCLT), will now hear the resolution plan of RCom and its units on August 5. Disruptive Asia