RCOM settles dues issue with Ericsson, to close $2.7 bn deal with Jio and Brookfield shortly

Reliance Communications Anil AmbaniIndian telecom operator Reliance Communications has reached a settlement with Ericsson and agreed to pay part of the dues to the Sweden-based company by the end of September, Reuters reported.

Ericsson, which signed a 7-year telecom managed services deal in 2014 to operate and manage Reliance Communications nationwide telecom network, has sought INR 11.55 billion. The Reuters report did not mention about the settlement amount.

The settlement potentially paves the way for the Anil Ambani-controlled telecoms operator to sell its wireless assets including mobile masts and airwaves to Reliance Jio Infocomm in a deal valued at $3.8 billion. Mukesh Ambani, the elder brother of Anil Ambani, owns Reliance Jio.

Reliance Communications said NCLAT has allowed the company to go ahead with asset sale to Reliance Jio and Brookfield for an aggregate value of INR 18,100 crore. The assets sale includes spectrum, fiber, telecom towers, MCNs and certain real estate assets in Delhi and Chennai.

Reliance Communications said it expects to complete the sale of its assets within the next few weeks, achieving an overall debt reduction of approximately INR 25,000 crore from the first phase of its asset monetization program.

An Indian appeals tribunal in New Delhi earlier put on hold insolvency proceedings against Reliance Communications as part of the settlement and asked it to pay Ericsson INR 5.5 billion or $81.5 million by the end of September.

National Company Law Appellate Tribunal (NCLAT) also asked Reliance Communications and Ericsson to file an affidavit by June 7 stating that the two companies will abide by the settlement.

Reliance Communications on Tuesday said its unit Reliance Infratel had reached a settlement with its minority shareholders in relation to the sale of its cellular tower and fiber assets across the country.

Reliance Communications, which stopped telecom operations in India, has a debt of INR 457.33 billion at the end of March 2017.