India's Supreme Court has cleared the sale of spectrum by Reliance Communications to Reliance Jio Infocomm, on the condition that the former furnishes a $14 billion rupee ($200.7 million) bank guarantee to the government.
The court instructed Reliance Communications to provide the sum in addition to putting a hold on the sale of a land parcel worth another 14 billion rupees, LiveMintreported. Both guarantees are to cover unpaid dues including spectrum acquisition costs.
The court meanwhile asked the government to issue a no objection certificate over the sale of the telecoms assets to Reliance Jio within a week of receiving the guarantee.
RCom had been challenging the demand to provide the corporate guarantee on the grounds that it is undergoing insolvency. The government had meanwhile been challenging an order from the Telecom Disputes and Settlement Appellate Tribunal (TDSAT) rejecting the Department of Telecom's demand for bank guarantees before approving the sale.
Reliance Communications arranged to sell most of its telecom assets, including its spectrum, tower, media convergence node and other assets to Reliance Jio as part of its insolvency proceedings. The company plans to become a business-to-business entity focused on its network of subsea cable assets.
Reliance Communications is a subsidiary of the Reliance Group, controlled by business magnate Anil Ambani. Reliance Jio is a subsidiary of Reliance Industries, controlled by Ambani's brother Mukesh.