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RCom, Reliance Jio Terminate Telecom Asset Transfer Agreements: 10 Things To Know

The companies ended the deal after failing to get approval from the telecoms regulator and objections from lenders, RCom said.

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RCom, Reliance Jio Terminate Telecom Asset Transfer Agreements: 10 Things To Know

RCom said the companies ended the deal after failing to get approval from the telecoms regulator

Industrialist Anil Ambani-led Reliance Communications Ltd (RCom) said on Monday it terminated a deal to sell its telecom assets to Reliance Jio Infocomm, the mobile telecom firm controlled by Anil's elder brother and Asia's richest man, Mukesh Ambani. The announcement comes at a time when Anil Ambani's Reliance Group, a diversified business empire, is facing falling valuations of group companies and a loss of goodwill, sparking heavy selling of pledged shares.
Here are five things to know about this story:
  1. The companies ended the deal after failing to get approval from the telecom regulator, objections from RCom's lenders and its decision to approach the bankruptcy court to resolve its debt, RCom said in a regulatory filing late on Monday.
  2. The statement also noted that the agreements dated December 28, 2017 and August 11, 2018 entered into between group companies RCom, RTL and RITL, and RJIL stood terminated.
  3. The “transactions have become incapable of being consummated in accordance with the terms thereof, on account of various factors and developments since the execution of the said agreements nearly 15 months ago”. 
  4. RCom stated factors such as non-receipt of consents/objections from RCom's over 40 lenders, and non-receipt of requisite clearances from the Department of Telecommunications among the factors that led to the termination of agreements.
  5. It also said the agreements - for sale of certain specified telecom assets by RCom - were terminated by mutual agreement.
  6. The filing noted the RCom group is committed to a comprehensive resolution of their overall debt “with transparency, certainty and finality, through the NCLT process”.
  7. The next date of hearing in this matter is fixed before the NCLAT on April 8, 2019, the company added.
  8. Earlier in the day, Swedish telecom equipment maker Ericsson said it had received Rs. 462 crore from Reliance Communications. The payment to Ericsson came within the deadline set by the top court late last month.
  9. The Supreme Court had ordered industrialist Anil Ambani's RCom and two of its directors to pay Ericsson Rs. 450 crore within four weeks or face a three-month jail term for contempt of court.
  10. Shares in Reliance Communications closed 9.3 per cent lower at Rs 4.00 apiece on the BSE, ahead of the release of the statement by the company. 

(With inputs from Reuters)

Disclaimer: NDTV has been sued for 10,000 crores by Anil Ambani's Reliance Group for its coverage of the Rafale deal



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