RCom granted extension to Ericsson debt deadline

RCom granted extension to Ericsson debt deadline

The Supreme Court of India has ruled in favour of extending RCom’s deadline to repay its INR5.5 billion ($74.8 million) debt to Ericsson.

The payment, which was agreed as part of a settlement deal, had been due on 30th September. Ericsson brought a case to the Supreme Court after RCom failed to meet the deadline, as it refused to grant the operator’s request for a 60 day extension.

The Supreme Court ruling supports RCom’s argument that it was unable to pay as a result of actions by the DoT (Department of Telecommunications) which held up the sale of its assets to Reliance Jio. RCom had planned to use the funds from this deal to pay Ericsson.

Justice Rohinton Nariman chaired the two-judge bench which ruled on the case, and was quoted as saying to RCom: “You ask for a reasonable period, we will give you and after that it’s over”. The operator now has until 15th December to pay its debt to Ericsson along with interest at a rate of 12% per annum. Nariman’s statement underlined that no further extensions will be granted.

Once RCom has paid the debt, its legal problems may not be over – its chairman Anil Ambani was targeted by Ericsson with a contempt petition for the operator’s failure to pay. The case will be heard after the new deadline.

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