The Supreme Court on Tuesday granted Reliance Communication time till December 15 to repay Rs 550 crore to its unsecured creditor, Swedish telecom major Ericsson, PTI reported. On October 2, the Anil Ambani-led Reliance Communication had sought a 60-day extension from the top court to clear its dues.
The Indian company had blamed the Department of Telecommunications for creating hurdles in its attempt to sell spectrum to Reliance Jio, and claimed that this prevented it from paying Ericsson. The statement came after reports said Ericsson had filed a contempt petition in the Supreme Court against Reliance Communication chief Anil Ambani.
A bench led by Justice RF Nariman said this was the firm’s “last opportunity” to clear the debt and permitted the creditor to revive its contempt plea against Reliance if the dues are not paid. A delay in payment will attract an interest of 12% per annum, the court said.
Senior advocate Dushyant Dave refuted the argument from Kapil Sibal, representing Reliance, about the department of telecom’s role. The claim is “completely bogey”, Dave said.
The company, which is in debt of about Rs 46,000 crore, has not been able to close its spectrum sale to Jio because the Department of Telecommunications has said it must pay up the spectrum dues first. The company is hoping to sell its assets to Jio and some other firms in a bid to pare its debt.
“Ericsson India Private Limited (‘Ericsson’), an unsecured creditor of RCOM, is understood to have filed a contempt petition on 1 October, 2018, in the Supreme Court in relation to the settlement amount of Rs 550 crore to be paid by RCom,” the company had said in its BSE filing. “This filing is unwarranted.”
It added: “The extension has been sought purely due to the fact that, as approved by 38 secured lenders and as per RCom’s undertaking, Ericsson is to be paid from the sales proceeds of spectrum being traded by RCOM, and such sale could not be completed as yet owing to factors beyond the control of RCom.”