Supreme Court refuses to lift stay on RCom asset sale to Reliance Jio

The Supreme Court on Thursday ordered that status quo be maintained on Reliance Communication's sale of assets to R-Jio on pleas by a consortium of banks.

The apex court bench, comprising Justices A K Goel, R F Nariman and U U Lalit, refused to lift the stay ordered by Bombay High Court on R-Com asset sale.

The top court will hear pleas from the consortium of banks and RCom against stay of assets sale by HC on April 5.

The State Bank of India had yesterday moved the apex court challenging a tribunal's order, which was upheld by the Bombay High Court, allowing Ericsson to stake a claim on RCom Consolidated's assets.

RCom owes Indian lenders Rs 420 billion.

RCom Consolidated incorporates the Anil Ambani-led group's Reliance Communications, Reliance Infratel and Reliance Telecom.

Apart from SBI, 24 other Indian lenders constitute the Joint Lenders Fora, including BoB, BoI, Canara Bank, Central Bank of India, PNB, IDBI Bank, UCO Bank, IOB, Dena Bank, Corporation Bank, Union Bank, United Bank, LIC and Barclays Bank.

They had initiated sale through a bidding of RCom Consolidated's assets. Reliance Jio Infocomm (Jio) had agreed to buy spectrum, cell towers and other infrastructure, including 1.78 lakh km of fibre optics line, of distressed RCom Consolidated for Rs 173 billion.

Apart from monetisation of secured assets, two properties of RCom Consolidated in Delhi and Chennai were proposed to be sold to third parties for Rs 8 billion.

However, when Jio's bid was finalised, Ericsson moved the arbitral tribunal and sought to restrain the sale of RCom Consolidated's assets on the ground that it had a claim of Rs 11.5 billion on the debt-ridden private telecom firm.

On March 5, the tribunal gave an order in favour of Ericsson. On March 8, the high court dismissed RCom's appeal against it.

SBI has total dues of Rs 40.27 billion against RCom Consolidated. In its appeal, filed through advocate Sanjay Kapur, it challenged the high court decision and said an unsecured creditor (Ericsson) could not steal a march over secured creditors like SBI.