Supreme Court defers permission to Rcom for selling assets to Reliance Jio
The SC has set the next hearing for April 5 to continue examining whether it will allow the sale to go through despite an ongoing legal challenge filed by Swedish telecom gearmaker Ericsson.business Updated: Mar 22, 2018 15:23 IST
The Supreme Court on Thursday refused to grant permission to Reliance Communications Ltd (RCom) to sell its wireless assets to upstart rival Reliance Jio Infocomm Ltd, saying it will hear the case again in two weeks.
The ruling marks a setback for RCom, which is trying to reduce debts worth $6.8 billion and pay back its creditors. The company’s shares dropped as much as 6.9% after the ruling.
The Supreme Court set a hearing for April 5 to continue examining whether it will allow the sale to go through despite an ongoing legal challenge filed by Swedish telecom gearmaker Ericsson at an arbitration tribunal. The Swedish company had sought the court’s help to prevent RCom from selling assets without its permission.
State Bank of India, one of RCom’s biggest creditors had filed a petition to the Supreme Court to allow the sale to go through even as Ericsson’s case remains at the arbitration tribunal.
RCom, controlled by billionaire Anil Ambani, had decided in December to sell its wireless assets to Jio in a deal pegged at $3.8 billion, sources said. The indebted company was keen to close the sale by March after previous debt-reducing attempts had failed.
RCom is also facing a separate legal challenge after the National Company Law Tribunal, India’s designated court for bankruptcy cases, last week stayed the asset sale following a petition filed by HSBC Daisy Investments (Mauritius) Ltd.