Tuesday, 26 October 2021

Indian billionaire pays million to Ericsson in face of jail

Image Credit: PTI

An heir to rags-to-riches billionaire Dhirubhai Ambani, Anil, has been entangled in a Bollywood-like feud with his brother over their father’s firm that once was India’s most valuable company. The price war with his sibling has ended with filing for bankruptcy for Anil’s Reliance Communications, from which Swedes wanted payment.

Indian tycoon Anil Ambani has paid a multimillion debt to the Swedish telecom giant Ericsson according to a decision by India’s Supreme Court. It ruled in February that the billionaire owner of the firm Reliance Communications would be imprisoned for three months if he failed to pay $65 million within four weeks. Before that, the 59-year-old businessman had refused to pay the Swedes almost $77 million in debt as was mandated by the country’s top court.

“We’ve received complete payments, as mandated by the Supreme Court, today from Reliance Communications”, Ericsson’s representative confirmed without detailing the settlement terms.

Reliance Communications, which is now $4 billion dollars in debt and experienced an almost 10 per cent fall on India’s Bombay Stock Exchange in the wake of reports about the settlement, has not commented on the matter.

Both companies reached a settlement in May as the Swedish giant tried to recoup $232 million from indebted Reliance Communications. The Indian company, which had filed for bankruptcy, failed to make payments.

Anil Ambani’s firm is now facing liquidation by November if it fails to pay to its lenders. Trying to avoid insolvency, the company tried to sell its assets to Reliance Jio, belonging to Anil’s brother, for $2.4 billion, which was stopped due to regulatory limitations.

The company ended with multibillion debts following a brotherly feud over the legacy of one of India’s richest men, Dhirubhai Ambani, who died in 2002 and left no will as the two fought for Reliance Industries and eventually split the country’s most valuable listed company, the Reliance group.

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