A group of lenders to Reliance Communications has moved the Supreme Court against a Bombay High Court order, which dismissed the telecom company’s appeal against an arbitration tribunal ruling that barred sale or transferring assets without prior permission.
“Secured creditors have the first right over sale of assets,” said a senior executive at State Bank of India, which is leading the lenders’ consortium.
RCom has already approached the SC against the high court decision. The top court will consider both petitions on Thursday.
Anil Ambani-controlled RCom is rushing against time to close the sale of most of its wireless assets to Mukesh Ambani-owned Reliance Jio Infocomm by March-end to avoid it landing in the bankruptcy court.
The company, along with its two units, is sitting on Rs 45,000 crore of debt. Completing the Jio deal valued at around Rs 25,000 crore will allow it to repay a part of the loan. But the tribunal’s order on arbitration initiated by telecom equipment maker Ericsson over unpaid bills, and the high court’s refusal to scrap that, has made it a difficult task.
RCom’s stance in the case is that secured creditors, such as banks, rank above unsecured vendors like Ericsson in any debt resolution plan.
Source: Economic Times