India operators Reliance Communications (RCom) and Reliance Jio extended the deadline for finalising an asset sale despite a government decision not to approve a long-planned spectrum trading agreement.
Troubled RCom, which reached a deal with Jio in early 2018 to sell off assets to pay down its huge debt, said in a Bombay Stock Exchange filing the two companies “extended the validity of the agreements… for sale of towers, fibre, MCNs and spectrum of RCom, and its affiliates to 28 June 2019”.
The statement noted the transactions are subject to various approvals that are in progress.
The Department of Telecommunication (DoT) last month rejected the long-planned agreement on the grounds it goes against spectrum trading guidelines days after Jio sought assurances it won’t be held responsible for RCom’s past spectrum-related charges, which could total as much as INR29.5 billion ($420.5 million). The DoT previously demanded payment of the dues as a condition for approving the agreement, but RCom is disputing the spectrum charge in court.
The filings were apparently designed to end speculation the asset sale was off, but Jio’s statement that the acquisition is subject “to approvals from governmental and regulatory authorities, consents from all lenders, release of all encumbrances on the said assets and other conditions precedent” clearly indicates it isn’t backing down from not wanting to be held liable for RCom’s previous spectrum changes.
A DoT representative said in December: “the ball is in their [Jio’s] court… Till then, this deal is off the table”.Subscribe to our daily newsletter Back