The Supreme Court has given Reliance Communications (RCom) time till December 15 to pay Swedish telecom equipment maker Ericsson its dues of Rs 550 crore, bringing relief to the Anil Ambani-owned telco.
"The bench told RCom that keeping in mind the difficulties they were facing in their asset sale, an extension till December 15 will be given but the operator will have to pay Ericsson by then," said senior counsel member Anil Kher, who along with senior counsel Dushyant Dave, represented Ericsson on Tuesday.
The court has also directed that RCom will have to pay Ericsson an additional payment, calculated at 12% per annum of the due amount for not being able to meet its earlier deadline.
The Supreme Court was hearing a legal battle between Ericsson and RCom over non-payment of Rs 550 crore by September 30, the stipulated period. RCom had filed for a 60-day extension to the deadline both in the Supreme Court and the National Company Law Appellate Tribunal (NCLAT), which had overseen the settlement between the telco and Ericsson.
Ericsson had even filed a contempt petition against RCom's chairman Anil Ambani for non payment of dues. The apex court will also hear the contempt petition filed by Ericsson against chairman Anil Ambani after December 15.
RCom, represented by senior advocate Kapil Sibal, told the apex court that they were yet to get the approval from Department of Telecommunications (DoT) for its spectrum sale, which was the main hurdle in its asset sale plan.
The telecom department in a separate legal tussle with the Anil Ambani-owned telco has said that it will not give approval to RCom's spectrum sale to Reliance Jio Infocomm (Jio), unless the Anil Ambani-owned telco furnishes bank guarantees worth Rs 2,947.68 crore to cover for spectrum usage charges
The battle between Swedish firm and Anil Ambani-owned telco started when Ericsson moved the dedicated bankruptcy court, National Company Law Tribunal (NCLT), against the telco. The equipment maker alleged that it had signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecom network, but had not been paid dues of some Rs 1,600 crore.
However, the operator had staved off insolvency by agreeing to pay the Swedish firm Rs 550 crore by September end. But NCLAT’s condition was that if the deadline isn’t met, any asset sale by RCom will be reversed and the telco will be dragged back into insolvency proceedings.
RCom, under a debt of Rs 46,000 crore, is desperately trying to sell its assets to Jio and Brookfield for about Rs 18,000 crore. While fibre and switching nodes have gone to Jio for Rs 5,000 crore, spectrum and some real estate is yet to be sold to the Mukesh Ambani-owned telco and Canadian asset management firm Brookfield, respectively.