OCTOBER 23, 2018
Anil Ambani-led Reliance Communications (RCom) was on Tuesday granted time till December 15 to repay a sum of Rs 550 crore to Swedish telecom equipment company Ericsson. The Supreme Court, however, said in its order that the debt-ridden telecom company will not be granted any further extension. RCom has been directed to pay a penal interest rate of 12 per cent from September 30. RCom was supposed to pay Rs 550 crore to Ericsson by September 30 but the top court said that the company violated its order in failing to meet the deadline.
The case relates to a petition filed by Ericsson seeking to bar Anil Ambani and two senior executives of his company from leaving the country. Ericsson alleged that Mr Ambani’s company had wilfully defaulted on payment of Rs. 550 crore. Ericsson also asked the court not to grant RCom permission to sell its mobile business assets.
However, in reply, RCom said that it can repay the money only after the sale of its assets gets an approval from the Department of Telecom (DoT). “DoT approval is beyond our control, spectrum sale is stuck on account of DoT nod,” RCom said.
A no objection certificate is required from DoT for the sale of spectrum, said RCom, adding, it will repay the dues to Ericsson within seven days of DoT’s nod.
However, Ericsson said that RCom had already received over Rs 5,000 crore from the sale of its assets. “It is raising the bogey to DoT nod to cause delays. RCom is taking the Supreme Court and Ericsson for a ride,” the Swedish company said.
At 1:32 pm, the stock of RCom traded at Rs 10.89, down Rs 0.01 or 0.09 per cent on the Bombay Stock Exchange.
Ericsson had signed a 7-year deal long back in 2014 to operate and manage RCom’s nationwide telecom network. After RCom failed to pay for its supplies procured from Ericsson, the latter initiated insolvency proceedings against the Mr. Ambani’s companies before the National Company Law Tribunal (NCLT) to recover Rs 1,150 crore. The dues have now risen to Rs 1,600 crore.
RCom had earlier petitioned the Supreme Court to quash insolvency proceedings initiated against it and other two subsidiaries. On the other hand, Ericsson India urged the Supreme Court not to do so till the former paid Rs 500 crore as mutually agreed between them.