By Prarthana Mitra
Marking the end to Reliance Communications’ asset monetisation programme, the Supreme Court on Friday granted a massive relief clearing its assets divestment to Reliance Jio Infocomm. It also ordained the parent company to pay off its dues to telecom equipment manufacturer Ericsson India within 120 days.
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Furthermore, Anil Ambani led-RCom is also suffering from heavy debt. Selling its assets like spectrum, telecom towers and optical fibre to Mukesh Ambani’s Jio will bring the company’s overall debt down from Rs 45,000 crore to Rs 20,000 crore. The Rs 25,000 crore which RCom will receive from Jio includes around Rs 18,000 crore in cash and another Rs 7,000 crore towards deferred spectrum liabilities, helping RCom to reinstate bank guarantees that were encashed by the telecom ministry earlier this year.
The balance is to be raised through monetisation of further assets, including the sale of its remaining 850 MHz spectrum assets to Jio. That is expected to generate around Rs 3,700 crore for the company. Monetising the Dhirubhai Ambani Knowledge City campus in Navi Mumbai and RCom’s 4-acre property in New Delhi is also on the cards, raising around Rs 10,000 crore in total.
The top court also approved RComs proposal for settlement of dispute with Ericsson India. The bench led by Justice Nariman noted that the operational creditor is willing to settle its debt of over Rs 1500 crore for Rs 550 crore. But it has to be paid by September 30, he ruled, asking RCom to adhere strictly to the deadline.
On July 27, Reliance Industries posted a record quarterly profit (consolidated) of Rs 9,459 crore, up 17.9%. Now with RCom’s gigantic spectrum, towers, 1.78 lakh km fibre and over 200 media convergence nodes, Reliance Jio might monopolise India’s telecom sector sooner than you think.
Prarthana Mitra is a staff writer at Qrius