March 22, 2018 / 8:42 AM / a year ago

India's top court defers asset sale permission to RCom

FILE PHOTO: A worker cleans a mobile store of Reliance Communications Ltd, controlled by billionaire Anil Ambani, in Kolkata, India, September 10, 2016. REUTERS/Rupak De Chowdhuri/File Photo

NEW DELHI (Reuters) - India’s top court on Thursday did not grant permission to Reliance Communications Ltd (RCom) (RLCM.NS) to sell its wireless assets to upstart rival Reliance Jio Infocomm Ltd, saying it will hear the case again in two weeks.

The Supreme Court ruling marks a setback for RCom, who is trying to reduce debts worth $6.8 billion and pay back its creditors. The company’s shares dropped as much as 6.9 percent after the ruling.

The Supreme Court set a hearing for April 5 to continue examining whether it will allow the sale to go through despite an ongoing legal challenge filed by Swedish telecom gearmaker Ericsson at an arbitration tribunal. The Swedish company had sought court’s help to prevent RCom from selling assets without its permission.

State Bank of India (SBI.NS), one of RCom’s biggest creditors had filed a petition to the Supreme Court to allow the sale to go through even as Ericsson’s case remains at the arbitration tribunal.

RCom, controlled by Indian billionaire Anil Ambani, had decided in December to sell its wireless assets to Jio in a deal pegged at $3.8 billion, sources said. The indebted company was keen to close the sale by March after previous debt-reducing attempts had failed.

RCom is also facing a separate legal challenge after the National Company Law Tribunal, India’s designated court for bankruptcy cases, last week stayed the asset sale following a petition filed by HSBC Daisy Investments (Mauritius) Ltd.

Reporting by Suchitra Mohanty, Writing by Sankalp Phartiyal, Editing by Sherry Jacob-Phillips

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