Anil Ambani, chairman of the debt-ridden telecom firm Reliance Communications Ltd (RCom), thanked his elder brother Mukesh Ambani, chairman of Reliance Industries Ltd, and Nita Ambani after they helped him avoid a jail term.
Mukesh stepped in by paying dues to Swedish company Ericsson, which confirmed on Monday it has received Rs 458.77 crore from RCom.
An RCom spokesperson stated that the requisite payment of Rs 550 crore and interest thereon to Ericsson has been completed in compliance with the Supreme Court judgment, News 18 reported.RCom, which owed Ericsson a one-time settlement of Rs 550 crore plus interest, had already deposited Rs 118 crore with the Supreme Court in February. The Swedish firm signed a deal in 2014 to manage and operate RCom’s network and last year approached the court over the unpaid dues.
“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita, for standing by me during these trying times, and demonstrating the importance of staying true to their strong family values by extending this timely support. I and my family are grateful and deeply touched with their gesture,” Anil Ambani said in a statement.
This is the second time that Mukesh Ambani has come to the rescue of his brother after their famous feud that dogged the Reliance Group and ended up splitting it into two between the two brothers.
In 2018, Reliance Jio Infocomm, controlled by Mukesh Ambani, bought RCom’s wireless assets for Rs 3,000 crore, in a sign that the acrimony of the past was buried.
RCom has struggled for cash partly a result of a price war triggered by the market entrance of Reliance Jio Infocomm, popularly called Jio.
With Monday’s payment, the debt laden telco ends its 18-month long battle with Ericsson.
RCom’s shares plunged 9.3 percent on Monday to close at Rs 4 on the BSE. The telco, which was once India’s second largest, was forced to shut has its wireless business late 2017 amid plunging revenue, widening losses and weighed under a debt of Rs 46,000 crore.
The company’s attempts to pay part of the dues, including interest, to Ericsson with its income tax refunds of Rs 260 crore failed with the National Company Law Appellate Tribunal (NCLAT) refusing to direct the lenders, including main financial creditor State Bank of India, to release the funds.
With RCom not meeting the deadline, Ericsson moved Supreme Court, which gave RCom another deadline – December 15, 2018 – to repay dues, both of which were missed by RCom.
When the principle settlement amount of Rs 550 crore was not paid, Ericsson filed three contempt petitions against Anil Ambani, chairman of RCom, and its two units were made party to the case.
The apex court, in February, held Ambani in contempt for not paying Ericsson’s dues despite having the money to do so. As per Supreme Court’s orders, March 19 was the last day to make the payment which included penal interests.