Reliance Communications (RCOM) has appealed to the Supreme Court to overturn a decision blocking the INR250 billion (USD3.8 billion) sale of its spectrum, fibre and tower assets to Reliance Jio Infocomm (Jio), the Economic Times reports. The transaction was due to be completed by the end of this month as part of its efforts to reduce its INR450 billion debt mountain and avoid entering insolvency and bankruptcy proceedings. A legal challenge from Swedish vendor Ericsson halted the sale, however, with the vendor claiming that the transfer would turn RCOM into a shell and prevent Ericsson from reclaiming the INR10 billion it is owed by the telco. For its part, RCOM claims that its secured financial lenders have a higher priority for repayment than Ericsson, and that the asset sale was in line with decisions made by those lenders. An arbitration court sided with Ericsson in the matter and the decision was upheld by the Bombay High Court.
Compounding the problem for RCOM, its tower arm Reliance Infratel was hit by a similar order after minority shareholders, including HSBC Daisy Investments, claimed that their consent had not been sought regarding the sale of the infrastructure firm’s assets. American Tower Company (ATC) and Avaya India have also reportedly submitted claims to recover unpaid dues totalling INR1 billion and INR75 million, respectively.