Reliance Communication’s shares jumped 12 per cent at 12:31 p.m. in Mumbai after the court order while the benchmark S&P BSE Sensex was up 0.1 per cent.
New Delhi: India’s top court ordered the government to approve the sale of billionaire Anil Ambani’s telecom assets once the tycoon submits guarantees to pay dues to state agencies. Reliance Communication Ltd.’s shares surged.
A two-judge bench of the Supreme Court headed by Justice Rohinton F. Nariman asked the government to clear RCom airwaves sale to Reliance Jio Infocomm Ltd. in 7 days, once Anil Ambani’s Reliance Realty submits the surety. India’s government had asked the court to block the sale unless bank guarantees worth 29.4 billion rupees ($422 million) were provided from either company toward spectrum usage charges.
Ambani agreed last year to sell mobile-phone towers, spectrum and fiber assets to older brother Mukesh Ambani’s Reliance Jio for 173 billion rupees to fend off bankruptcy action by creditors. The brothers have since wrapped up smaller deals, including one involving transmission nodes, but RCom has been awaiting clearance from the Department of Telecommunication. The company had about $7 billion in debt outstanding as of March 2018.
Reliance Communication’s shares jumped 12 percent at 12:31 p.m. in Mumbai after the court order while the benchmark S&P BSE Sensex was up 0.1 percent. The company’s stock has dropped 60 percent so far this year.
RCom’s lawyer Kapil Sibal told the court that real estate firm Reliance Realty will deposit a new corporate guarantee for 14 billion rupees to the Department of Telecommunications within two days. The wireless operator had earlier said it had given land valued at 140 billion rupees as security for the government’s dues but wasn’t in a position to provide bank guarantees. – Bloomberg