SC orders status quo on RCom's assets sale to Jio
22 Mar 2018
The supreme Court today stayed Anil Ambani-owned Reliance Communications' (RCom) plans to sell its asets to elder brother Mukesh Ambani's Reliance Jio Infocomm (Jio) while refusing a plea by RCcom, backed by a consortium of banks, to lift the stay on the sale of assets by the Mumbi High Court on 8 March 2018.
RCom had moved the apex court following the Bombay High Court's dismissal of its appeal to set aside an interim order by an arbitration tribunal to stay the Relaince Jio's acquisition of Reliance Communications' asses to enable debt-laden RCom to escape bankruptcy proceedings. The apex court had said that it will hear pleas of consortium of banks, R-Com against stay of assets sale by Mumbai High court on 5 April.
The court said that the sale could take place subject to its final order.
On 28 December 2017, RCom had announced the sale of its wireless spectrum, tower, fibre and media convergence node assets to Jio, as a resolution plan to reduce the company's debts by Rs39,000 crore.
On March 8, the Bombay high court rejected RCom’s appeal against an order of an arbitration tribunal barring the sale or transfer of its assets without prior permission.
Swedish telecom equipment maker Ericsson had moved an arbitratoion tribunal seeking to restrain the sale of RCom consolidated's assets in a bid to recover Rs1,150 crore from Rcom. The tribunal on 5 March allowed Ericsson claim, which RCom challenged and lost in the Mumbai High court on 8 March.
On Wednesday, 21 March, State Bank of India (SBI) as the lead bank of a consortium of 24 Indian lenders also backed RCom's plea in the top coourt for staying the Mumbai High Court's order barring the sale of its assts (See: SBI approaches Supreme Court to allow RCom asset sale to Reliance Jio).
SBI in its petition before the Supreme Coyurt has challenged the Mumbai High Court decision saying an an unsecured creditor (Ericsson) could not be prioritised for payments over secured creditors like SBI.
RCom's total dues to SBI as on 28 February stood at Rs 4,027 crore.
RCom in a statement to the bourses on Wednesday said that its bondholders have approved "with overwhelming majority" sale of its "certain assets" to Jio.