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India denies immunity for Jio against RCom's liabilities

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India denies immunity for Jio against RCom's liabilities

The Indian government refused to grant immunity to Reliance Jio Infocomm Ltd. from dues and liabilities arising from its spectrum and mobile tower deal with Reliance Communications Ltd., The Times of India reported Jan. 7, citing a senior official of the telecom department.

The approximate dues pending could reportedly amount to about 30 billion Indian rupees, stuck in multiple industry litigations with the government.

Earlier, the telecom department rejected a proposal from RCom to sell 122.4 MHz of spectrum to Jio after Jio wrote to the department stating it is not responsible for RCom's past spectrum dues.

The telecom department official said, however, one of the two telcos are responsible for the payment of dues when they arise.

RCom has not been able to secure a bank guarantee needed for the proposed transaction with Jio to succeed, the report said. The company instead, got a special Supreme Court permission to provide a corporate guarantee through its unit Reliance Realty Ltd. worth 14 billion rupees.

Both companies have also extended the terms of their deal by six months till June 28 to allot more time to negotiate conditions.

A closure of the deal will allow RCom to trim a debt load of 450 billion rupees, including 5.5 billion rupees it owes to Ericsson, the report said. Ericsson has now sought a jail term for RCom boss Anil Ambani over unpaid dues.

Meanwhile, in a Jan. 7 filing to the Bombay Stock Exchange, an RCom spokesperson said the company deposited a partial payment of 1.31 billion rupees to Ericsson with the Supreme Court Registry, sourced from the operational funds available with RCom. The court has also given four weeks to RCom to file its response to a contempt petition filed by Ericsson.

As of Jan. 7, US$1 was equivalent to 69.81 Indian rupees.