Reliance Communications and its subsidiaries have replenished bank guarantees aggregating INR 774 crore with the Department of Telecommunications, thereby ensuring that the department does not cancel its licenses and spectrum. The payment to DoT was done four weeks ahead of the last date of September 10.
“RCOM and its subsidiary, Reliance Telecom Limited, have today reinstated bank guarantees aggregating INR 774 crore with the DoT, four weeks ahead of the last date of 10th Sep 2018 as granted by the Hon’ble Telecom Disputes Settlement and Appellate Tribunal (TDSAT),” said the telco in a regulatory filing on Monday.
“The reinstatement of the BGs ensures that RCom’s license and spectrum value of Rs. 11,300 crore stands fully protected, and RCom is fully compliant with the guidelines of NIA 2013 and NIA 2015,” the telco added.
The issue started when Department of Telecommunications issued two show-cause notices to RCom, threatening to cancel its licences in 14 circles and revoke spectrum allotted in 2013 and 2015. The telecom department in the notices cited breach of licence conditions and non-payment of spectrum dues.
RCom moved TDSAT against DoT’s notices and has told the tribunal in prior hearings that cancelling licences would push the telco back into insolvency since it would not be able to complete its deal with Reliance Jio Infocomm (Jio).
The company expects to raise Rs 18,000 crore from sales of wireless assets to Jio and real estate assets to Canada’s Brookfield, and reduce its INR 46,000 crore debt by repaying lenders.
It will sell an additional around 65 MHz spectrum in the 800 MHz band to Jio for around INR3,500-INR 3,700 crore which will help in bringing down the telco’s debt further.