RCom Proposes Upfront Payment of Rs 500 Crore to Ericsson as Settlement Amount

Anil Ambani-led telco Reliance Communications has offered an upfront payment of Rs 500 crore to the Swedish manufacturer, Ericsson which filed a petition in the NCLT against RCom pushing the telco towards insolvency. During the hearing of the National Company Law Appellate Tribunal, which happened yesterday, Kapil Sibal, who stood for Reliance Communications suggested that an upfront payment be made to Ericsson. Chairman Justice S J Mukhopadhaya who heads the NCLAT bench vouched for a settlement for both the parties. The bench commented “You know the fate of operational creditors (In corporate resolution process). You may not even 5%. If you want we would give you time for settlement.”

rcom-ericsson-settlement

Ericsson’s counsels who were also present in the hearing remarked that the dues totalled to Rs 978 crores which had now risen to Rs 1,600 crore. On this, the bench said “If you want, we can allow settlement. Find out ways and means to solve the issue.”

The appellate tribunal has listed that RCom be heard tomorrow for its plea against the NCLT order which has passed for the insolvency of the telco. If gone through, this would mean that all the assets of Reliance Communications would freeze, barring it from selling its wireless assets to recover some amount.

Kapil Sibal, the counsel of Reliance Communications presented some numbers in front of the bench as he spoke that the total debt of Rs 46,000 was over RCom’s head, he also did not forget to add that Reliance Jio, which was offering to buy RCom’s assets was agreed on paying Rs 17,000 crore upfront. The deal would also include spectrum dues and transfer of debts.

Ericsson had signed a 7-year deal long back in 2014 to operate and manage RCom’s nationwide telecom network. Later the Swedish company alleged that it had not been paid the dues and that the Anil Ambani led telco has defaulted on the payment. It was in September last year that the Swedish company filed a petition in the NCLT’s Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that according to their allegations, RCom allegedly owes it.

It was on May 15 that the Mumbai bench of the National Company Law Tribunal (NCLT) finally admitted an insolvency petition by Ericsson against Reliance Communications and two of its subsidiaries in lieu of recovering pending dues.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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Kirit Patel (Ahmedabad)Hon3yKiran Fernandes | GoaKirti KhuranaSunny | Lucknow Recent comment authors
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Kirit Patel (Ahmedabad)
Kirit Patel (Ahmedabad)

Like to see Jio band 5 speed on 10 MHZ in coming days in Gujarat.

Sunny | Lucknow
Sunny | Lucknow

I am getting upto 50 Mbps down and 20 Mbps up on band 5. It remains usable throughout the day even when band 40 and 3 are overloaded. Depends on user density in an area though. Don’t expect a miraculous performance.

Hon3y
Hon3y

Any Source ?

Kirit Patel (Ahmedabad)
Kirit Patel (Ahmedabad)

Jio own 5 MHz + rcom 2.5 MHz + adding mts 3.75 = it will make 10 MHz chunk

Kunal
Kunal

Rcom to sell another 66 mhz spectrum to jio @ 3700 crores. Jio will get around 190 mhz total spectrum which will be a boost for jio. The deal to be announced shortly.

Aman
Aman

This is Band 3 Spectrum which is non liberalised and will be liberalised post sale to Jio. But my major apprehension is non availability of band selection in handset. Now its high time when manufacturer should incorporate band selection feature in handsets, else band 3 and 5 will be useless as phone always prioritises on band 40

Kirti Khurana
Kirti Khurana

You can root & do it.

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

Which will be on band? Will Jio deploy band 1 LTE soon?Will they buy more in auction same band?

Kirit Patel (Ahmedabad)
Kirit Patel (Ahmedabad)

Kunal, which frequency band in 66 mhz?

Kirti Khurana
Kirti Khurana

It appears all the remaining liberalised spectrum Rcom has.

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