The Supreme Court ordered Reliance Communications Ltd to furnish corporate guarantees of Rs 1,400 crore within two days, paving the way for the sale of its spectrum to Reliance Jio Infocomm Ltd.
A bench headed by Justice Rohinton Nariman asked the government to issue a no-objection certificate for the spectrum sale within seven days after the guarantee is submitted.
The court said a corporate guarantee, backed by properties as assurance already submitted following an order of Telecom Dispute Settlement Appellate Tribunal, is sufficient for government approval.
In an earlier hearing before a different bench, RCom said that it cannot submit the Rs 2,940-crore bank guarantees demanded by the Department of Telecommunications due to the insolvency proceedings against the company.
It was willing to deposit land parcels instead of the bank guarantee. It said that if the government’s permission does not come on time, the deal to sell assets to Reliance Jio will collapse and banks will end up not getting any money.
In the hearing on Friday, 30 November, Reliance Realty, which owns the properties submitted before the tribunal, will give the corporate guarantee in two days, lawyers Kapil Sibal and Mukul Rohatgi told the court, Bloomberg reported.
Shares of the Anil Ambani-led company surged as much as 15.5 percent to Rs 14.72 after the verdict. The company’s stock has lost nearly 60 percent of its value in 2018, compared to the nearly 40 percent drop in the benchmark S&P BSE Telecom Index.
(This story was originally published on BloombergQuint.)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)