Ericsson agreement clears way for RCom asset sale - Mobile World Live

Ericsson agreement clears way for RCom asset sale

06 AUG 2018

India’s Supreme Court gave the green light for troubled operator Reliance Communications (RCom) to proceed with a INR250 billion ($3.63 billion) asset sale, after the company settled a legal dispute with Ericsson.

RCom had been prevented from completing the sale of wireless and fixed assets to Reliance Jio when an interim order was slapped on the company in March due to the ongoing litigation.

Legal wrangling persisted for a number of months as Ericsson continued to chase a INR11.56 billion sum for non-payment of service charges.

Following pressure from authorities, the two eventually settled on a sum of INR5.5 billion.

RCom is planning to complete the sale of assets to Reliance Jio, including spectrum, fibre, towers and real estate, and pay-off Ericsson by the end of August. In a statement, RCom said the two transactions would help to accelerate “its overall debt resolution plan.”

Legal tussle
The agreement will see an end to a legal fight which has taken 11 months to resolve.

In September 2017, Ericsson filed a bankruptcy petition against the debt-laden operator in what the vendor described as a “last resort” to resolve the issue.

During the course of a number of hearings, the two were repeatedly rumoured to be close to a settlement. However, as late as last week Ericsson was still threatening to pull out of a potential deal.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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