RCom, Reliance Jio terminate pact for sale of telecom assets

RCom, Reliance Jio terminate pact for sale of telecom assets

The Supreme Court had last month held Ambani in contempt for not paying Ericsson's dues despite promising to do so.

Reliance Communications could not be reached for comment.

The nature of the backing and how it was delivered is unclear, but in a statement Anil Ambani thanked his billionaire brother "for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support".

The pair ended up splitting the Reliance group, which was India's most valuable listed company. They also rejected Reliance Communications' unconditional apology. They had engaged in a bitter public battle after their father, Dhirubhai Ambani, died without leaving a will in 2002.

The first signs of a thawing of relations came about when their mother, Kokilaben Ambani, brokered a peace agreement between the two in May 2010.

The deal involved Reliance Communications selling its telecom towers, spectrum, optic fibre network and media convergence nodes to Reliance Jio, a unit of Mukesh Ambani-led Reliance Industries Ltd, for an unspecified amount.

The judges warned that Ambani would be jailed for three months if 4.5 billion rupees were not stumped up within a month.

The apex court on February 20 had held Ambani guilty of contempt of court and ordered the debt-laden company to clear the dues to Ericsson within four weeks or face a 3-month jail term.

RCom, which owes a total 5.71 billion rupees to Ericsson, including a one-time settlement of 5.5 billion rupees and interest payments of 210 million rupees, had already deposited 1.18 billion rupees with the Supreme Court in February.

RCom had also planned to sell airwaves and mobile masts to Jio, and real estate to other buyers for 181 billion rupees ($2.64 billion) in a bid to shore up its finances.

An Ericsson spokesperson confirmed that the telecom gear maker had received the full payment from the Reliance Communications (Rs 458.7 crore) on Monday and Rs 118 crore previously.

"The said transactions have become incapable of being consummated in accordance with the terms thereof, on account of various factors and developments since the execution of the said agreements almost 15 months ago.", RCom said in a regulatory filing.

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