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Reliance Communications stock closes 11.92% higher after SC clears spectrum sale to Reliance Jio

RCOM in a communication to the bourses said, "Department of Telecommunications (Union of India) to grant a No-Objection to Reliance Communications Limited for spectrum trading within 7 days. RCOM's 100 per cent subsidiary, Reliance Realty Ltd, will submit a Corporate Guarantee of Rs 1,400 crore within 2 days."

twitter-logo BusinessToday.In        Last Updated: November 30, 2018  | 17:22 IST
Reliance Communications stock closes 11.92% higher after SC clears spectrum sale to Reliance Jio

The Reliance Communications stock closed higher today after the Supreme Court asked Department of Telecom (DoT) to clear the telco's spectrum sale to Reliance Jio Infocomm on a corporate guarantee of Rs 1,400 crore ($201.06 mln). The stock closed 11.92% higher at 14.27 level compared to its previous close of 12.75 on the BSE.

The small cap stock rose 15.45% intra day at Rs 14.72 level. It has gained after two days of consecutive fall.

The stock has gained 13.25% during the last one year but lost 60.60% since the beginning of this year.

RCOM in a communication to the bourses said, "Department of Telecommunications (Union of India) to grant a No-Objection to Reliance Communications Limited for spectrum trading within 7 days. RCOM's 100 per cent subsidiary, Reliance Realty Ltd, will submit a Corporate Guarantee of Rs 1,400 crore within 2 days."

The telecom department had challenged the telecom tribunal TDSAT's order allowing Reliance Communications to sell spectrum to Reliance Jio without providing bank guarantee.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in its order dated October 11, 2018, rejected plea of the Department of Telecom (DoT) seeking bank guarantee of around Rs 2,900 crore before it permits sale of RCom spectrum to Reliance Jio.

"The Hon'ble Supreme Court upheld the earlier order of the Hon'ble Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and no Bank Guarantee is now required.

The spectrum trading transaction will now be completed and RCOM will pay-off Ericsson and minority investors of Reliance Infratel Limited (RITL).

RCOM's asset monetization program thus proceeds as per plans," RCom said.

RCom signed an agreement with Mukesh Ambani-owned Reliance Jio Infocomm Ltd to sell spectrum and other telecom assets for an estimated Rs 25,000 crore and clear its debt of about Rs 46,000 crore partially.

However, the spectrum sale deal was stuck for clearance from the DoT for want of bank guarantee. RCom in August completed the sale of its fibre assets and related infrastructure assets, worth Rs 3,000 crore, to Reliance Jio.

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