RCom, Reliance Jio terminate pact for sale of telecom assets

Andrew Cummings
March 18, 2019

Under the deal, Ericsson to manage services of wireline and wireless network for RCom covering more than 100,000 km of fiber and mobile infrastructure in 11 telecom circles, across North and West of India including Delhi and Mumbai.

"My honest and heartfelt thanks to my respected elder brother, Mukesh and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support".

Swedish telecom equipment maker Ericsson has received ₹4.62 billion from Anil Ambani-led Reliance Communications Ltd (RCom), a spokeswoman for Ericsson said on Monday.

Almost 15 months after Anil Ambani agreed to sell assets of Reliance Communications to a telecom firm run by elder brother Mukesh, the two groups on Monday called off the deal citing delays in approval from the government and lenders.

RCom had also sought approval from its lenders to release tax refunds of a further 2.6 billion rupees to Ericsson.

The apex court on February 20 had held Ambani guilty of contempt of court and ordered the debt-laden company to clear the dues to Ericsson within four weeks or face a 3-month jail term.

It could not be immediately ascertained from where the company raised the funds, or whether it was paid from Anil Ambani's personal accounts. Ericsson refuses and files contempt of court petition in the Supreme Court against Anil Ambani. A fine of Rs 1 crore was also imposed by the top court on each on them.

The Court sets March 19 as the deadline and says a default would result in Ambani facing three months imprisonment.

The Court grants an opportunity to Anil Ambani to overcome contempt by paying Ericsson the balance amount after deducting the Rs 118 crore already deposited in the Court.

On Monday, RCom shares fell 9.30% to ₹4.00 apiece on the BSE while the benchmark Sensex gained 0.19% to end the day at 38,095.07 points.

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