Anil Ambani-led Reliance Communications said it was confident of overcoming the twin legal challenges posed by shareholders in its tower subsidiary and one of the company’s unsecured creditors, Ericsson.
The company is selling much of its spectrum, fiber, towers and other network assets to Reliance Jio Infocomm, led by Anil Ambani’s brother Mukesh, for an undisclosed amount.
The proceeds are expected to be used for paying back part of the Rs 45,000 loans from banks, bondholders and other secured lenders.
The company pointed out that it is using the proceeds to pay back secured creditors, who have a stronger claim over the company’s assets compared to unsecured creditors or shareholders.
“As legally advised, the claims of minority investors of Reliance Infratel Ltd , subsidiary of the Company and / or unsecured vendors cannot under any circumstances rank in higher priority than the undisputed claims of secured domestic and international lenders and any stay granted in this regard is not defensible in law and is liable to be vacated,” the telecom operator said in an update on the challenges today.
The monetization effort has run into rough weather after objections were filed by a section of shareholders in the company’s tower subsidiary, Reliance Infratel Ltd. National Company Law Tribunal, Mumbai Bench on Monday issued a stay on the sale of the fiber and tower assets.
“The Company will appeal for vacation of such stay before National Company Law Appellate Tribunal shortly after receipt of the detailed order,” RCom said today.
Similarly, Swedish telecom services company Ericsson initiated arbitration against the company, seeking dues of around Rs 1,150 cr for the services that it has been providing the company, and was also able to get a stay.
The Indian company filed a petition in the High Court to get the stay imposed by the arbitration panel vacated. However, the Bombay High Court dismissed RCom’s appeal.
“The Company has just received written order of the Hon’ble High Court and will take necessary actions in the best interest of all the stakeholders,” RCom added.