New Delhi: In a major jolt to Anil Ambani’s Reliance Communications (RCom), the department of telecommunications (DoT) Tuesday refused to give clearance to the proposed RCom-Reliance Jio Infocomm spectrum trade deal.
As part of its debt reduction efforts, RCom had in December 2017 signed a Rs 250-billion deal with elder brother Mukesh Ambani’s Reliance Jio. The deal included the sale of assets mortgaged with different banks to avoid insolvency proceedings. The company expected to raise Rs 180 billion from the sale of its wireless assets to RJio and real estate assets to Canada’s Brookfield, and pare some of its Rs 460-billion debt.
Earlier, the Supreme Court had asked RCom to furnish a corporate guarantee of Rs 14 billion within 2 days, following which DoT had to give it a No Objection Certificate (NOC) for the RCom-RJio spectrum sale deal within seven days. All seemed to be going as planned, RCom furnished the guarantee amount and DoT agreed to give it the green signal.
Friday, DoT had told the apex court that it was ready to provide the company an NOC for spectrum and asset sale to Jio. However, by Tuesday, the DoT reversed its stand following Jio’s letter, where it sought assurances from the government that it won’t be held liable for RCom’s past dues related to airwaves.
In a letter to the DoT, RJio stated that although RCom offered a corporate guarantee of Rs 14 billion towards settling its dues, the licence conditions stipulated that it should also give a bank guarantee.