RCom jumps after Mukesh Ambani bails out brother Anil on Ericsson dues

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"My honest and heartfelt thanks to my respected elder brother, Mukesh, and (his wife) Nita, for standing by me during these trying times, and demonstrating the importance of staying true to our strong family values by extending this timely support", said Anil, 59. "I and my family are grateful we have moved beyond the past, and are deeply touched with this gesture", he said in a brief statement issued through the company spokesperson.

The requisite payment of Rs 550 crore and interest thereon to Ericsson has been completed today in compliance of the judgment of the Supreme Court. Repeated failures to pay and Anil's personal guarantee landed him in trouble in February, with India's top court giving him a month's notice to comply or face prison. Following this ordeal, a almost decade and a half long bitter battle ensued between the two.

Reliance Communications has paid the required 5.5 billion rupees (US$80 million), said Ruchika Batra, a spokeswoman for Ericsson.

Jio said the master agreement for acquisition of certain specific assets of RCom and the spectrum trading agreement for change in allotment of certain specific spectrum stand terminated. Shares of RCom closed at Rs 4 apiece on the BSE Monday, 9.30 per cent lower than the previous close.

ET was the first to break the story about RCom making the payment, on its online platforms earlier Monday.

Mukesh and Anil Ambani fell out spectacularly after their rags-to-riches father died in 2002 without a will, leaving them to fight for control of his Reliance Industries conglomerate. Anil Ambani got newer businesses such as telecom, power generation and financial services.

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The non-compete clause was scraped in 2010, and Mukesh quickly re-entered the telecom sector, buying a company which had won 4G licences in all 22 circles.

RCom has struggled for cash partly a result of a price war triggered by the market entrance of Reliance Jio Infocomm, popularly called Jio.

This was after the Supreme Court last month found billionaire businessman guilty of contempt on a plea filed by Ericsson India. The Swedish telecom equipment vendor started off with a bankruptcy petition and then played hardball to the point it extracted a personal guarantee from Ambani. Reliance Telecom (RTL) and Reliance Infratel (RITL) are units of RCom.

In separate statements, RCom and Jio announced scrapping of the deal, citing delays in getting approvals from the government and lenders. If they failed to do so, they would have to serve a jail term of three months. Jio said the deal to but nodes and fibre stood.

The company suffered a blow when National Company Law Appellate Tribunal (NCLAT), last week, refused to free up Rs 260 crore tax refunds withheld by the lenders. "RCOM Group is committed to a comprehensive resolution of their overall debt, with transparency, certainty and finality, through the NCLT process", the telco added. Once India's second-biggest phone carrier, RCom shut down its mobile business late in 2017.

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