Twin Verdicts Pave Way for $4 Billion RCom-Jio Deal, With Riders
(Bloomberg) -- A corporate court allowed lenders to proceed with selling some assets of Anil Ambani’s Reliance Communications Ltd. to Reliance Jio Infocomm Ltd., but ordered that the proceeds be held in an escrow account until it decides on a dispute with a minority shareholder.
The latest decision marks a partial victory for RCom a day after India’s top court vacated a separate order, freezing the deal, in a case filed by the Indian unit of Ericsson AB. The National Company Law Appellate Tribunal said on Friday that the asset sale can only close after a judgment is reached on a dispute with HSBC Daisy Investments (Mauritius) Ltd.
The twin orders bring RCom a step nearer to completing the sale of its airwaves, towers and fiber assets to Reliance Jio, controlled by India’s richest man and Anil’s older brother Mukesh Ambani. HSBC Daisy owns a little over 4 percent in RCom’s tower unit, Reliance Infratel Ltd. The lawsuit will next be heard on April 18.
RCom shares have advanced 10 percent in the past two trading sessions and traded at 24.55 rupees as of 2:27 p.m. in Mumbai. The company told exchanges on April 5 that lifting the stay on asset sales would help it pare debt by about 250 billion rupees ($3.9 billion) “within the next few weeks” in the first phase of its asset monetization plan. The deal with Reliance Jio, announced end-December, was widely seen as a bailout that had helped RCom stave off insolvency.
©2018 Bloomberg L.P.