Lenders of the beleaguered Anil Ambani-led Reliance Communication's (RCom) are unlikely to agree to a request by the debt-laden company for releasing the Rs 260 crore it received as income-tax refunds and lying in a bank account, to pay off Swedish equipment maker Ericsson, a media report says.
The Supreme Court has in a strongly worded order directed Anil Ambani as boss of the Reliance ADA Group to pay Ericsson some Rs 550 crore in four weeks or serve a three-month jail term. The court has instructed the registrar to release Rs 118 crore that RCom had deposited in the court to Ericsson and asked the company to pay the balance amount, Business Standard website said.
If the banks seek the approval of the respective boards to meet RCom request, there is likely to be a delay in decision-making, defeating the very purpose of the move, sources say.
"RCom is confident of raising the balance about Rs 200 crore for payment to Ericsson, in order to ensure that the entire Rs 550 crore, plus interest thereon, stands paid to Ericsson, well within the time of four weeks allowed by the Supreme Court," RCom had said in a statement, according to the Business Line.
This is in addition to the Rs 118-crore RCom had deposited with the Supreme Court Registry, said the court order. The court will hand over this deposit to Ericsson in a week.
RCom's deadline to pay Ericsson Rs 550 crore ended on December 15, which had been personally guaranteed by Anil Ambani.
The Anil Ambani group company got into trouble after a spectrum sale deal with elder brother Mukesh Ambani's Reliance Jio for telecom spectrum sales could not go through after the Department of Telecommunication (DoT) objected citing back dues. Jio was not willing to give the undertaking to meet the dues that RCom owed DoT.
The court had earlier directed the Department of Telecommunications (DoT) to provide a no-objection certificate (NOC) to RCom for the spectrum sale. But DoT took the stand that the NOC could be given only if the buyer undertook to clear RCom's past debts.
Following the failure to meet the deadline for paying Ericsson, RCom moved a bankruptcy application with the National Company Law Tribunal (NCLT) following which the shares of several Anil Ambani group companies like RCom, and Reliance Power crashed. The fall in market capitalisations forced Reliance Power's lenders to sell the shares pledged with them as security for loans. Anil Ambani called the share sale by the lenders including Edelweiss Financial Services Ltd and L&T Finance illegal, while the creditors maintained the stand that failure to provide the margin after the value of the pledged shares eroded triggered the sales.
Financial troubles have hit Anil Ambani when he has been mired in a political controversy following the inclusion of his fledgeling Reliance Defence as an offset partner in Rs 58,000-crore deal that Prime Minister Narendra Modi's government signed with Dassault Aviation to buy 36 Rafale medium multirole fighter jets for the Indian Air Force (IAF).
The opposition has attacked the Bharatiya Janata Party-led National Democratic Alliance (NDA) government over alleged favour to the Anil Ambani-led company with the general elections 2019 just weeks away. Congress president Rahul Gandhi-led opposition United Progressive Alliance (UPA) has mounted a scathing attack on the government over the deal.