Supreme Court to hear RCom case against Bombay HC decision on Thursday

The Supreme Court said it will hear on Thursday Reliance Communications'(Rcom) plea to remove a legal hurdle which threatens to stall its efforts to complete the sale of wireless assets to Reliance Jio Infocomm .

RCom moved the Supreme Court last week, after the Bombay High Court dismissed its appeal against an arbitration tribunal ruling to bar the sale or transfer of its assets without prior permission, people familiar with the matter. While the company faces other cases and curbs on transactions of some assets, the arbitration tribunal’s order affects the entire Rs25,000 crore deal with Jio that is crucial for it to avoid landing in the bankruptcy court.

The petition in the Supreme Court is a last ditch effort by RCom, as the company and two of its units, Reliance Infratel and Reliance Telecom, race against time to complete the deal before the end of the fiscal year. It needs the money to repay 35 lenders, failing which they could take it to the National Company Law Tribunal (NCLT) under the Insolvency & Bankruptcy Code.


The Anil Ambani-led telco, under debt of Respect 45000 crore, in late December struck a deal to sell most of its spectrum, fibre, towers and switching nodes to Jio.

Ericsson, which is claiming Rs 1,012 crore of arrears from RCom, got an arbitration tribunal order preventing the transfer of the telco’s assets till further orders.

RCom's stance in the case is that secured creditors, such as banks, rank above unsecured vendors like equipment supplier like Ericsson in any debt resolution plan.