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We Cannot Risk Servicing RCom Past Dues, Says Jio

Reliance Jio Infocomm (Jio) reiterated its stance that it will not be responsible for Reliance Communications’ (RCom) past dues. “We can’t take risk of servicing past dues. Past liabilities should not come to the buyer. Liabilities post spectrum trade should not come to the buyer,” Anshuman Thakur, head of the strategy for Jio, told.

Thakur’s comments come on the back of the tussle between RCom, Jio and the telecom department over spectrum related dues that have delayed RCom’s asset sale, including spectrum, to the Mukesh Ambani-owned telco. Jio, the potential buyer of airwaves, has refused to be held liable for RCom’s past spectrum-related dues, prompting the Department of Telecommunications (DoT) to reject the deal, saying the Mukesh Ambani-owned company’s stance was against rules.RCom is desperate to close the trading deal to use the funds to pay operational creditor Ericsson Rs 550 crore, and other lenders, including 37 banks. The telco’s chairman Anil Ambani has been issued a contempt notice on Ericsson’s plea for missing two payment deadlines.

The spectrum sale was held up after Jio wrote to the government last month saying it wanted an assurance that it would not be held responsible in the future for RCom’s past dues. Jio had also written that DoT should only clear the deal once Jio confirmed that RCom had fulfilled certain conditions agreed to between the two companies. The dispute went up to the Supreme Court, which directed DoT to approve the trading pact after accepting a Rs 1400 crore corporate guarantee, instead of a bank guarantee, as well as a parcel of land from an RCom subsidiary to cover the dues. But DoT and Jio have both said that they weren’t sure about RCom’s corporate guarantee, prompting the Mukesh Ambani-owned company’s letter and DoT’s response of rejecting the deal.“The corporate guarantee was given instead of bank guarantee by RCom.

Tower and fiber deal has not been completed yet, they are held up for different reasons and some are in court. We are using RCom towers and our operations don’t get impacted,” said Thakur. As per the Rs 18000 crore asset monetization plan, RCom is to sell spectrum, telecom towers, switching nodes and fibre to Jio, and some real estate sale to Canadian asset management firm Brookfield. Switches and nodes have been sold for Rs5000 crore, while the rest are held up.—Bullfax

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