Supreme Court lifts HC stay on RCom asset sale to Jio, no relief in NCLT case

Anil Ambani Group’s Reliance Communications cleared a major hurdle for the sale of its assets to Reliance Jio with the Supreme Court lifting the stay imposed by the Bombay High Court on the transaction. However, there was no immediate relief for the company on the the NCLT stay.

The stay by the High Court was imposed after unsecured creditor and vendor of services Ericsson demanded to be paid Rs 1,150 cr for the network management services that it has been providing.

“The SC has directed that secured lenders can proceed with the asset sales in accordance with law,” Reliance Communications said. “Accordingly, there is now no bar in immediately completing the asset sales of spectrum, MCNs and real estate, and the same shall be concluded expeditiously,” it added.

However, the company still has to wait for the verdict of the National Company Law Board Tribunal to sell some of the contracted assets.

A section of stakeholders in its tower subsidiary have successfully blocked the sale of towers and fiber to Reliance Jio, arguing that they have a higher claim over these assets compared to the lenders of the parent company.

The Supreme Court refused to lift the stay imposed by the NCLT on their behalf, and asked RCom to argue its case before the tribunal.

“On the stay granted by NCLT in favor of minority investors holding approx. 4% shareholding in Reliance Infratel, which is limited to tower and fibre assets, the Hon’ble SC has not made any comments on merits, and has instead only directed RCOM and its lenders to follow due procedure, and file an appeal before the NCLT, instead of directly approaching the Hon’ble Supreme Court,” the company said.

“Based on the order of the Hon’ble SC as above, RCOM is confident of securing appropriate relief from the NCLT to enable sales of tower and fibre assets to also be completed at the earliest,” it said.

“The claim of the minority investors (which is fully disputed by RCOM) can, in any case, be a maximum of approx. Rs. 200 – 300 crore from the sales proceeds,” it added.

RCOM intends filing the aforesaid appeal before NCLAT tomorrow, with a request for expeditious disposal of the same, it said.

Based on these developments, RCOM is now confident of achieving overall debt reduction of approx. Rs. 25,000 crore within the next few weeks, from the first phase of the asset monetisation programme as detailed in the media release issued on 26th December, 2017.