Business Standard

RCom, Reliance Jio extend validity of asset sale pact to June-end


Press Trust of India New Delhi
Reliance Communications and Reliance Jio announced Monday that they have extended the terms of an agreement for acquisition of wireless assets of the Anil Ambani-owned firm, to June-end.
The breather of sorts for Reliance Communications comes at a time when its spectrum sale deal is in a limbo, awaiting clearance from the telecom department.
The Department of Telecom (DoT) has so far stuck to its position that the deal cannot be cleared unless clarity emerges on past liabilities, payment of dues and associated charges, particularly as the Mukesh Ambani-led Jio has refused to take any payment liability of his younger sibling's firm RCom to conclude the spectrum trading deal between the two firms.
In a regulatory filing on Monday, Reliance Industries informed that Jio, its subsidiary, has extended the term of the definitive agreement for the acquisition of specified assets of Reliance Communications Limited and its affiliates to June 28, 2019.
The acquisition is subject to receipt of requisite approvals from governmental and regulatory authorities, consents from all lenders, release of all encumbrances on the said assets and other conditions, it said.
In another filing, Reliance Communications said the company and Reliance Jio have "extended the validity of the agreements signed on 28th December 2017 for sale of towers, fiber, MCNs and spectrum of RCOM and its affiliates to 28th June 2019".
"The transactions are to be consummated subject to various approvals that are presently in progress," RCom added.
Reliance Communications has been urging the telecom department to grant it the "long-awaited no-objection certificate". But DoT officials point out that giving a green signal would be difficult, in the light of Jio's purported reluctance to take on past liabilities of Reliance Communications, and given that both the parties are not willing to take on responsibility of payment of dues.
Senior officials of Reliance Communications and Reliance Jio had also met the telecom secretary this month to discuss outstanding issues raised by DoT on payment related to spectrum sale deal between the two companies.
The Anil Ambani-owned company had, earlier, asserted that "being a continuing licensee", it remains committed to discharging any outstanding or disputed amount subject to final adjudication.
Reliance Communications had said that the requirement of giving bank guarantee as per Telecom Department's demand has been substituted by the orders of telecom tribunal and the Supreme Court, and that its unit Reliance Realty had provided a non-disposal undertaking and corporate guarantee.
"Hence, compliance with the trading guidelines is met," RCom had asserted in an earlier statement.
Last year, RCom signed a blockbuster deal with Reliance Jio for the sale of wireless spectrum, tower, fibre and media convergence nodes assets - the proceeds of which were to be used to pare its staggering Rs 46,000 crore debt.
From that deal, RCom has so far announced the completion of the sale of optical fibre assets worth Rs 3,000 crore and sale of its media convergence nodes worth Rs 2,000 crore to Reliance Jio Infocomm.
RCom has to pay dues of Rs 550 crore to Swedish telecom equipment maker Ericsson, and about Rs 230 crore to Reliance Infratel minority stakeholders.

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First Published: Dec 31 2018 | 7:30 PM IST

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