Mukesh Ambani, chairman of Reliance Industries Ltd, has provided around Rs 450-crore bailout to younger brother Anil Ambani, potentially saving the chairman of the debt-laden telecom firm Reliance Communications Ltd (RCom) from a jail term in a case involving a payout to Swedish company Ericsson.
"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.
Earlier on Monday, Swedish telecom equipment maker Ericsson said it has received Rs 458 crore from RCom.
Separately, RCom and Reliance Jio mutually decided to terminate agreements for sale of specified assets that they signed in December 2017 and August 2018, citing delays in approval from the government and lenders.
"The agreements dated 28th December 2017 and 11th August 2018 entered into between RCom, RTL, RITL (Rcom Group) and JIO respectively for sale of certain specified telecom assets have been terminated today by mutual agreement," RCom said in a statement.
"The said transactions have become incapable of being consummated in accordance with the terms thereof, on account of various factors and developments since the execution of the said agreements nearly 15 months ago," the company added.
In February, the Supreme Court found Anil Ambani guilty of contempt of court for willfully failing to pay Ericsson. The court had ordered Anil Ambani and two RCom directors to pay Ericsson Rs 458 crore within four weeks or face a three-month jail term for contempt of court.
This means the big brother has provided a lifeline to Anil Ambani despite issues in the past as Nita and Mukesh Ambani have stepped in to save Anil in the nick of time.
In effect, this is the second occasion 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.
Nonetheless, the latest bailout is significant given the bitter dispute that has raged in the past. In 2006, Anil Ambani sent legal notices, warning criminal proceedings against Mukesh Ambani group-promoted companies and others involved in the transfer of shares of new companies formed from Reliance Industries.
RCom, which owes a total Rs 571 crore to Ericsson, including 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.
RCom has struggled for cash partly a result of a price war triggered by the market entrance of Reliance Jio Infocomm, popularly called Jio.
RCom is committed to a comprehensive resolution of its overall debt, with transparency, certainty and finality, through the NCLT process, it concluded.
-With inputs from agencies.
Disclosure:
Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
First Published: Mar 18, 2019 9:18 PM IST
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