(Bloomberg) -- India's top court ordered the government to approve the sale of billionaire Anil Ambani's telecom assets once the tycoon submits guarantees to pay dues to state agencies. Reliance Communication Ltd.'s shares surged.
A two-judge bench of the Supreme Court headed by Justice Rohinton F. Nariman asked the government to clear RCom's airwaves sale to Reliance Jio Infocomm Ltd. in seven days, once Anil Ambani's Reliance Realty Ltd. submits the surety. India's government had asked the court to block the sale unless bank guarantees worth 29.4 billion rupees ($422 million) were provided from either company toward spectrum usage charges.
Ambani agreed last year to sell mobile-phone towers, spectrum and fiber assets to older brother Mukesh Ambani's Reliance Jio for 173 billion rupees to fend off bankruptcy action by creditors. The brothers have since wrapped up smaller deals, including one involving transmission nodes, but RCom has been awaiting clearance from the Department of Telecommunication. The company had about $7 billion in debt outstanding as of March 2018.
Read more about the wealth gap dividing India's richest brothers
Reliance Communication's shares jumped 12 percent in Mumbai on Friday while the benchmark S&P BSE Sensex was little changed. The company's stock has dropped 60 percent so far this year.
RCom's lawyer Kapil Sibal told the court that real estate firm Reliance Realty will deposit a new corporate guarantee for 14 billion rupees to the Department of Telecommunications within two days. The wireless operator had earlier said it had given land valued at 140 billion rupees as security for the government's dues but wasn't in a position to provide bank guarantees.
“If the deal falls, the government will get nothing, banks will get nothing.” Sibal said in court. “Everyone stands to lose.”
To contact the reporter on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net
To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Anto Antony
©2018 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
