April 6, 2018 / 9:36 AM / a year ago

India's RCom gets tribunal nod for tower, fiber assets sale

A man speaks on his mobile phone as he walks past a closed shop painted with an advertisement of Reliance Communications in Mumbai, India, January 29, 2018. REUTERS/Shailesh Andrade

(Reuters) - Reliance Communications Ltd (RCom) (RLCM.NS) said on Friday the National Company Law Appellate Tribunal (NCLAT) has given its approval for the debt-laden company to proceed with the sale of its tower and fiber assets.

India’s Supreme Court on Thursday lifted a high court stay on sale of the company’s assets including media convergence nodes (MCNs), spectrum and real estate, allowing its secured lenders to proceed with the sale.

The National Company Law Tribunal had prevented RCom from selling any asset without its permission, following a legal challenge from Swedish telecoms gear maker Ericsson (ERICb.ST), seeking payment of unpaid dues of 11.55 billion rupees ($177.7 million) by RCom and two of its units.

Proceeds of the sale will be deposited with state-run State Bank of India (SBI.NS) in an escrow account, RCom said in a statement. here

However, distribution of proceeds from the fiber and tower asset sale will be subject to the final decision of the NCLAT on April 18, the embattled telecoms firm controlled by businessman Anil Ambani said.

The claim of minority investors in the tower and fiber sale proceeds, which RCom says is “fully disputed”, could be about 2 billion rupees to 3 billion rupees, RCom said.

The company, once India’s second-biggest phone carrier, owed banks about $7 billion as of March 2017, when it last made public its debt numbers, and more to vendors.

Shares of the Mumbai-based company rose as much as 8.1 percent before closing 3.2 percent higher on Friday.

Reporting by Vishal Sridhar in Bengaluru; Editing by Amrutha Gayathri and Sunil Nair

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