UPDATE 3-Brotherly love at Reliance? India's Mukesh Ambani provides 'support' to brother Anil as debt paid off

  • Reuters
  • Stock Market News
UPDATE 3-Brotherly love at Reliance? India's Mukesh Ambani provides 'support' to brother Anil as debt paid off
Credit: © Reuters.

* RCom pays 5.5 bln rupees to Ericsson (BS: ERICAs )

* RCom's Anil Ambani thanks brother for "timely support"

* RCom-Jio airwaves deal falls through (Adds detail, background)

By Sankalp Phartiyal and Krishna V Kurup

MUMBAI, March 19 (Reuters) - The Ambani brothers, whose public feud over control of the Reliance empire after their father's death in 2002 led to a split in the conglomerate, may have taken a major step to a more harmonious relationship on Monday.

India's richest man Mukesh Ambani, who controls oil-to-telecoms powerhouse Reliance Industries RELI.NS that is now worth many times the troubled business group run by his younger brother Anil, appears to have offered some kind of support to ensure Anil paid off a 5.5 billion rupees ($80 million) debt.

That was owed to Swedish telecom equipment company Ericsson ERICb.ST and had been run up by his telecoms group Reliance Communications RLCM.NS . If Anil didn't pay the debt, then he had been threatened by India's Supreme Court with a prison term.

The nature of the backing and how it was delivered is unclear, but in a statement Anil Ambani thanked his billionaire brother "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".

In that same short statement, Reliance Communications said the requisite payment had been made to Ericsson to comply with an Indian Supreme Court judgment.

The development may mark a watershed moment in the relationship between the two brothers, who carved their separate businesses in 2005 with Mukesh Ambani getting the oil and petrochemicals business and Anil winning control of power, telecoms and financial services.

The feud for the control of the business began between the two brothers after their father Dhirubhai Ambani, a schoolteacher's son and founder of the Reliance empire, died in July 2002.

Peace was finally brokered by their homemaker mother Kokilaben in 2005, in a deal that split the Reliance business.

Like other Indian telecoms firms, Reliance Communications (RCom) was hit by a fierce price war following the entry of Mukesh Ambani's telecom upstart Jio, which offered free voice and cut-price data plans. Once India's second-biggest phone carrier, RCom shut down its mobile business late in 2017.

India's Supreme Court had ordered Anil Ambani and two RCom directors to pay Ericsson within four weeks or face a three-month jail term for contempt of court. court had found RCom's chairman guilty of contempt of court for failing to pay the Swedish company.

RCom had also planned to sell airwaves and mobile masts to Jio, and real estate to other buyers for 181 billion rupees ($2.64 billion) in a bid to shore up its finances. RCom said the airwaves deal had been called off by "mutual consent" due to objections from India's telecom department and more than 40 of the company's foreign and domestic lenders.

Ericsson said RCom paid it dues of 4.62 billion rupees, the balance of funds that it was owed. RCom had already deposited 1.18 billion rupees due to Ericsson with the Supreme Court in February.

The Swedish firm approached the court in 2018 over the unpaid dues from a deal it had signed in 2014 to manage and operate RCom's network.

($1 = 68.6200 Indian rupees)

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  • abdul rashid @abdul rashid
    I liked indias move on RCOM with 4 week time. amazing
    Like 0

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