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Reliance Communications Chairman <keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword> said the telecom sector is heavily burdened with tax and the Indian Government should consider providing a three-year moratorium on increased Goods and Services Tax (GST), which is scheduled for July 1 rollout. While addressing a media briefing, Indian tycoon Ambani, whose RComm is laden under debt giving nightmares to banks, said telecom sector has no money for government’s airwave auction. Ambani said telecom companies’ total bank loans stand at Rs 2.8 lakh crore. Ambani said there is a huge competition in data and voice tariff space and “free plan wars” in September led to high competition. “Telecom sector has cut 10,000 jobs last year and the stress will further lead to reducing 30,000-40,000 jobs more this year,” said Ambani. He held the media briefing to assure investors amid the debt load and ratings downgrades. Ambani, 57, said lenders had accepted plans presented for debt reduction and formed joint forum. “Company to get standstill on debt obligations for seven months. I believe both Aircel and Brookfield deals will reduce debt by 60%. Reliance Communications will hold 50% stake in new wireless company Aircom and we are confident we will complete all transactions ahead of time,” said Ambani. RCom has seen its market value slashed by a third after shares have plunged since May 5 when ratings agency ICRA downgraded its debt over concerns about its profitability and debt loads. “We are disappointed at recent downgrades by rating agencies. We are committed to restoring credit ratings at the earliest. Rating companies’ expectation of intensive price-competition is there to stay,” he said.

Telecom sector is heavily burdened with tax, 40k more job cuts likely this year: Anil Ambani

<ul><li>In the last week, <keyword id="46907" type="COMPANY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword> has sold ₹50 billion worth of telecom assets to Reliance <keyword id="2003276" type="COMPANY" weightage="20" keywordseo="Jio">Jio</keyword> as part of a plan to reduce debt. </li><li>The deals comprise the first tranche of a larger agreement, signed in December 2017, for the sale RComm’s entire fibre and tower network, and most of its mobile spectrum. </li><li>The deal is symbolic of the converging fortunes of the two brothers. The price war initiated by Reliance Jio’s entry was the final nail in the coffin for RComm. </li></ul>On 27 August, the Anil Ambani-owned Reliance Communications (RComm) announced that it had completed the sale of ₹30 billion worth of fibre and infrastructure assets to Reliance Jio, which is owned by Anil’s brother <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>. The sale follows a similar one last week, wherein RComm sold its media convergence nodes (MCN) and other infrastructure assets to Jio for ₹20 billion. The deals comprise the first tranche of a larger agreement, signed in December 2017, for the sale RComm’s entire fibre and tower network, and most of its mobile spectrum. This includes the sale of 120 MHz of 4G spectrum, over 40,000 towers, nearly 180,000 kilometres of fiber and 248 MCNs. RComm will use the proceeds of the the agreement to reduce its heavy debt burden, which was estimated to total a staggering ₹460 billion last year. The agreements are a crucial component of RComm’s plan to monetise ₹250 billion worth of assets and the unsustainable portion of its debt obligations. In a cruel twist of fate, RComm is selling its telecom assets to the very company that forced it out of business in the first place after it struggled to find buyers. A tale of two telecom companies The deal is symbolic of the converging fortunes of the two brothers. Following its launch in September 2016, Reliance Jio has disrupted the Indian telecom market by reducing rates, onboarding customers in droves and forcing competitors to speed up their innovation. Of course, it helps that the company is funded with the war-chest of <keyword id="6355199" type="DOMAIN" weightage="20" keywordseo="reliance-industries">Reliance Industries</keyword> Ltd, a petrochemical conglomerate. At the end of June 2018, Jio overtook Vodafone to become India’s <a href="https://www.business-standard.com/article/companies/rjio-becomes-second-largest-telco-by-revenue-adds-most-subscribers-in-june-118082700147_1.html">second-largest telecom company</a> by revenue. Meanwhile, RComm has faced a completely different trajectory. <keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword> inherited the company after a 2005 demerger of Reliance Industries. Even though it grew to become India’s second-largest telecom operator, it continually lost market share in the earlier part of the decade and was unable to stay solvent owing to price war initiated by Reliance Jio. Following an intense period of restructuring, Anil Ambani had his sights set on transforming RComm into a B2B company, primarily engaged in the sale of cloud infrastructure and submarine cable systems, but the plan has been put on hold for now.

Anil Ambani’s RComm gets a lifeline from brother Mukesh Ambani’s Jio as first phase of asset sale is completed

(Image source- Reuters) <ul><li><keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s Reliance <keyword id="2003276" type="COMPANY" weightage="20" keywordseo="Jio">Jio</keyword> has stood its ground on a decision to not cover the spectrum-related <keyword id="6425811" type="UNKNOWN" weightage="20" keywordseo="debts">debts</keyword> of <keyword id="46907" type="COMPANY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword>. </li><li>As a result, the India’s Department of Telecommunications (DoT) has maintained its decision to deny a no-objection certification to deal, which involves the sale of around ₹200 billion worth of <keyword id="6359803" type="UNKNOWN" weightage="20" keywordseo="spectrum">spectrum</keyword> to Jio. </li><li>RCom was counting on the deal, to restructure its debt and settle its dues with a range of creditors, most notably, Ericsson, which is still waiting on a ₹5.5 billion principal payment in addition to interest. </li></ul> Mukesh Ambani’s Reliance Jio has stood by its decision to not cover the spectrum-related debts of Reliance Communications, which is owned by his brother <keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword>, according <a href="https://indianexpress.com/article/business/companies/jio-reliance-communications-spectrum-deal-on-hold/">to media reports</a>. As a consequence of this, the India’s Department of Telecommunications (DoT) has denied a no-objection certification to deal, which was signed by the two brothers’ companies in December 2017. The move effectively suspends an important<a href="https://www.businessinsider.in/anil-ambanis-rcomm-gets-a-lifeline-from-brother-mukesh-ambanis-jio-as-first-phase-of-asset-sale-is-completed/articleshow/65562272.cms"> lifeline</a> to RCom. RCom was counting on the deal, which involves the sale of around ₹200 billion worth of spectrum to Jio, to restructure its debt and settle its dues with a range of creditors, most notably, Ericsson, which is still waiting on a <a href="https://www.businessinsider.in/anil-ambanis-rcom-secures-extension-on-crucial-debt-payment-avoiding-bankruptcy-and-keeping-hopes-of-a-bailout-alive/articleshow/66347032.cms">₹5.5 billion</a> principal payment in addition to interest. The DoT first <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/dot-rejects-rcom-jio-spectrum-trading-deal/articleshow/67154238.cms">objected </a>to the Reliance Jio’s proposed acquisition of 122.4 MHz of spectrum from Anil Ambani’s heavily-indebted Reliance Communications (RCom) a few days ago. The reason? Reliance Jio had communicated to the government that it would not assume liability for the spectrum debts that RCom still had to clear with the DoT. The disputed payment in question amounts to ₹29.5 billion. Hence, the deal was in violation of the government’s spectrum trading guidelines, which states that in such deals the buyer is liable to clear the seller’s outstanding debts. The DoT was not able to approve the deal under Reliance Jio’s conditions and reportedly left it to Mukesh Ambani’s firm to reconsider the decision. If things stand as they are, RCom will, in all likelihood, have to undergo <keyword id="128499" type="COMPANY" weightage="20" keywordseo="insolvency">insolvency</keyword> proceedings if Ericsson revives the matter in the Supreme Court. Anil Ambani’s firm is currently weighed down by ₹460 billion of debt. The deal was expected to go through after the Supreme Court ruled on 1 December that RCom could furnish <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/sc-asks-rcom-to-furnish-corporate-guarantee-of-rs-1400-crore-to-clear-spectrum-deal-with-jio/articleshow/66877361.cms">a corporate guarantee of ₹14 billion</a> backed by a deed to a land holding for the spectrum debt, as opposed to a bank guarantee of ₹30 billion - which would have been significantly harder to obtain but it is easier to encash. However, the DoT expected Reliance Jio to assume liability in the event that there was some problem with the corporate guarantee. SEE ALSO: <a href="https://www.businessinsider.in/anil-ambanis-rcomm-gets-a-lifeline-from-brother-mukesh-ambanis-jio-as-first-phase-of-asset-sale-is-completed/articleshow/65562272.cms">Anil Ambani’s RComm gets a lifeline from brother Mukesh Ambani’s Jio as first phase of asset sale is completed</a> <a href="https://www.businessinsider.in/anil-ambanis-rcom-secures-extension-on-crucial-debt-payment-avoiding-bankruptcy-and-keeping-hopes-of-a-bailout-alive/articleshow/66347032.cms">Anil Ambani’s RCom secures extension on crucial debt payment, avoiding bankruptcy and keeping hopes of a bailout alive</a>

Mukesh Ambani’s Reliance Jio decides that it may be too expensive to give brother Anil Ambani’s RCom a lifeline after all

<ul><li><keyword id="15491" type="COMPANY" weightage="20" keywordseo="Airtel">Airtel</keyword> has made an upfront ₹9,500 crore offer for all of Rcomm’s assets.</li><li>Mukesh Ambani’s <keyword id="2003276" type="PERSON" weightage="20" keywordseo="Jio">Jio</keyword> has only offered a ₹3,600 crore cash payment.</li><li>But even the highest bid is still just one fourth of the company’s debt of ₹46,000 crore.</li></ul><keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword>’s <keyword id="46907" type="CITY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword> has received bids from Airtel, Jio and others for its assets. While that is good news for shareholders, the amounts they receive show that its many lenders might recover only a sliver of the massive ₹46,000 crore debt. The highest bid was by Bharti Airtel which made a ₹9,500 crore upfront offer, sources told <a href="https://www.livemint.com/industry/telecom/bharti-airtel-offers-highest-upfront-cash-for-rcom-assets-but-with-riders-11574922030448.html">Mint.</a> Meanwhile Anil Ambani’s elder brother Mukesh Ambani’s Jio has offered ₹3,600 crore as cash payment, but hasn’t bid on spectrum or real estate assets. The others who bid include UV Asset Reconstruction and US-based equity fund Varde Partners. Rcom’s assets include airwaves in 14 telecom circles, 43,000 telecom towers, licence for its 800 MHz 4G spectrum--that is set to expire in July 2021. RCom’s real estate assets are also up for offer. Lenders have been trying to sell all of its assets at one go, instead of auctioning each asset individually. Reliance Communications slipped into bankruptcy in May this year, after which resolution professionals took over the company. It had been losing customers for years before due to extreme competition and an excessive debt that ate into its equity value as well. It had tried to sell its assets to Jio earlier this year but it could not go through after Ericsson filed a case in courts on non-payment of <a href="https://www.businessinsider.in/anil-ambanis-rcom-could-get-refund-from-ericsson-says-india-court/articleshow/68794729.cms">dues</a>. See Also: <a href="https://www.businessinsider.in/stock-market/news/anil-ambanis-rcomm-and-rnel-stocks-gain/articleshow/72256319.cms">Two Anil Ambani Group stocks — which were trading for less than ₹1 — are buzzing again</a> <a href="https://www.businessinsider.in/anil-ambani-owned-rcom-assets-may-fetch-less-than-25-of-dues-to-chinese-banks/articleshow/70942671.cms">Chinese banks have a lot to lose as Anil Ambani’s RCom assets may be worth a quarter of the loans</a>

RCom lenders might recover just a fourth of their loans after asset sale

<ul><li>Airtel, Infratel among others have placed bids for the assets of Reliance Communication. </li><li>However, Reliance Jio has still not placed a bid. </li><li><keyword id="46907" type="COMPANY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword> has total assets worth ₹40,721 crores. </li></ul><keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword>’s Reliance Communications which is currently undergoing bankruptcy proceedings might have relief in store for its lenders. Unlike many high profile bankruptcies like Jet Airways which are finding it tough to get bidders, six companies including Airtel have bid for RCom’s <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/airtel-submit-bids-for-rcom-spectrum-jio-seeks-deadline-extension-by-10-days/articleshow/72027456.cms">asset</a>s. However, many expected his brother Mukesh Ambani’s Reliance Jio to bid for the spectrum, fiiber and tower assets of RCom. Jio which had bid for the assets before RCom went into bankruptcy had to take it back, after the status of the indebted telecom company changed. But this time around, Jio has not placed a bid yet, and instead sought for an extension to the November 11 deadline. The bankrupt Reliance Communications reportedly has total assets worth ₹40,721 crore, according to Moneycontrol. According to <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/reliance-communications-may-complete-rs-25000-cr-assets-sale-by-aug-end-to-pay-ericsson-rs-550-crore/articleshow/65292722.cms?from=mdr">reports</a>, Rcomm’s assets include airwaves in 14 telecom circles, 43,000 telecom towers, licence for its 800 MHz 4G spectrum (that is set to expire in July 2021), along with other real estate. Jio had earlier bought optic fibre and assets for ₹3000 crore and media convergence nodes and infrastructure for ₹2000 crore. In May 2019, Reliance Communications moved to the National Company Law Tribunal to file for bankruptcy. It had saddled a total debt of ₹46,000 crore, and had been trying to sell assets to pay off some of it long before it landed into insolvency.

Bharti Airtel treads where Reliance Jio is measuring its steps – RCom’s assets

<ul><li>Yesterday, the Chief Justice of India was forced to dismiss two registrars. </li><li>They were reportedly let go for changing the wording in a document in order to prevent Ambani from making a personal appearance in court. </li><li>The case, which was filed by <keyword id="6356812" type="ORGANIZATION" weightage="20" keywordseo="ericsson">Ericsson</keyword>, involves contempt proceedings against <keyword id="46907" type="COMPANY" weightage="20" keywordseo="Reliance-communications">Reliance Communications</keyword> and its promoter <keyword id="9171" type="PERSON" weightage="20" keywordseo="Anil-Ambani">Anil Ambani</keyword> for the non-payment of a ₹5.5 billion loan.</li></ul>As Ericsson’s contempt proceedings against Reliance Communications and its promoter Anil Ambani for the non-payment of a ₹5.5 billion loan near a conclusion, it seems that some people in the <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword>’s camp were trying to save Anil Ambani the embarrassment of appearing in court. Yesterday, the Chief Justice of India was forced to dismiss two registrars, Manav Sharma and Tapan Chakaraborty, - whose job it is to upload orders on the SC website - for deliberately changing the wording in a document in order to prevent Ambani from making a personal appearance in court, according <a href="https://www.telegraphindia.com/india/supreme-court-sacks-2-of-its-own-over-change-in-order-on-ambani/cid/1684489">to the Telegraph</a>. The order, which was dated January 7, called for Ambani to submit to questioning in court. However, the order which was uploaded reportedly featured a clause, “personal appearance of the alleged contemnor(s) dispensed with”. The word “not” was omitted to suggest that Ambani wasn’t required to show up. After representatives of Ericsson pointed out the mistake, the correct version of the order was uploaded a few days later on January 10. A follow-up inquiry reportedly revealed that the omission of the word “not” was deliberate. Concurrently, the Supreme Court’s verdict in the contempt please case was reserved yesterday. Anil Ambani has made personal appearances for the past two days in front of the bench led by Justice RF Nariman. Earlier this month, Reliance Communications <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/from-glory-to-dust-an-ambani-brands-journey-to-bankruptcy/articleshow/67837769.cms">commenced insolvency proceedings</a> through the <keyword id="6354457" type="ORGANIZATION" weightage="20" keywordseo="National-Company-Law-Tribunal">National Company Law Tribunal</keyword>. The former telecom major has nearly ₹450 billion in debts. In order to trim its debt burden, Ambani was hoping to secure a mammoth sale of spectrum assets to his brother Mukesh Ambani’s <keyword id="2003276" type="COMPANY" weightage="20" keywordseo="Jio">Jio</keyword>. However, the deal was called off in December last year. As things stand, Reliance Communications is struggling to find buyers for its assets. SEE ALSO: <a href="https://www.businessinsider.in/mukesh-ambanis-reliance-jio-decides-that-it-may-be-too-expensive-to-give-brother-anil-ambanis-rcom-a-lifeline-after-all/articleshow/67174546.cms">Mukesh Ambani’s Reliance Jio decides that it may be too expensive to give brother Anil Ambani’s RCom a lifeline after all</a> <a href="https://www.businessinsider.in/anil-ambanis-rcomm-gets-a-lifeline-from-brother-mukesh-ambanis-jio-as-first-phase-of-asset-sale-is-completed/articleshow/65562272.cms">Anil Ambani’s RComm gets a lifeline from brother Mukesh Ambani’s Jio as first phase of asset sale is completed</a>

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Telecom sector is heavily burdened with tax, 40k more job cuts likely this year: Anil Ambani

Akanksha Jain

Anil Ambani’s RComm gets a lifeline from brother Mukesh Ambani’s Jio as first phase of asset sale is completed

Dilsher Dhillon

Mukesh Ambani’s Reliance Jio decides that it may be too expensive to give brother Anil Ambani’s RCom a lifeline after all

Dilsher Dhillon

RCom lenders might recover just a fourth of their loans after asset sale

Sanchita Dash

Bharti Airtel treads where Reliance Jio is measuring its steps – RCom’s assets

Sanchita Dash

India’s Supreme Court dismisses two staff members for trying to protect Anil Ambani from personal appearance

Dilsher Dhillon

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