London, May 22: A UK court on Friday directed Reliance Group Chairman Anil Ambani to make an interim payment of $716.91 million within 21 days, while it vacated a pre-trial review and trial proceedings listed for 2021.
The court also directed the embattled businessman to pay £750,000 as trial proceeding costs to three Chinese banks, who had filed the case to claim their dues, The Hindu Business Line reported.
Of the total $716.91 million, $549.80 million is the principal outstanding amount under a facility agreement Ambani had entered into with the banks, according to the court order reviewed by BusinessLine.
The claimants –Industrial and Commercial Bank of China Ltd, Mumbai Branch, on behalf of itself, China Development Bank and Exim Bank of China — had earlier filed a case seeking to recover $680 million owed to them as part of a loan agreement.
About $51.92 million is the outstanding interest as per the agreement and $ 115.19 million is the default interest, the order by The High Court of Justice, Business and Property Courts of England and Wales, Queen’s Bench Division, Commercial Court, said.
The final amount owed by Ambani would be assessed based on the outcome of Reliance Communications’ (RCom) insolvency procedures, which is currently underway in India.
“The pre-trial review (listed for February 19, 2021) and the trial of these proceedings (listed to commence on March 18, 2021) are hereby vacated,” the order said.
Reacting to the court order, a spokesperson for Ambani said, “The matter pertains to an alleged personal guarantee for a corporate loan availed by Reliance Communications Limited (RCom) in 2012 for global refinancing. It is emphasized that it is not a personal loan of Mr Ambani. ICBC made their claim based on an alleged guarantee that was never signed by Mr Ambani and he has consistently denied having authorized anyone to execute any guarantee on his behalf.”
“The amount ordered to be paid based on the alleged guarantee, will in any case reduce substantially upon the imminent resolution of RCom’s debt in accordance with the Insolvency & Bankruptcy Code, 2016. The amount claimed under the alleged guarantee will reduce by up to 50 per cent as per the Resolution Plan for resolution of RCom’s debt which has been approved by 100% of RCom’s lenders and has already been filed in the National Company Law Tribunal on 6 March 2020,” the spokesperson added.
The statement further said that as far as the judgment of the UK Court is concerned, the question of any enforcement in India does not arise in the near future, and Ambani is seeking legal advise on the future course of action.
“As per the UK Court Order, the final amount owed under the alleged guarantee will be assessed based on the outcome of the RCom resolution plan filed before NCLT, Mumbai. The Order of the UK Court will have no bearing on the operations of Reliance Infrastructure Limited, Reliance Power Limited and Reliance Capital Limited,” the spokesperson said.
Earlier on February 7, 2020, a High Court judge in London had ordered Ambani to pay $100 million pending the trial of a debt claim by the three Chinese banks. The payment was asked to be paid within 6 weeks.
The Chinese banks had sought action against Ambani over an alleged breach of a personal guarantee on a debt refinancing loan of about $925 million that was due to mature in March 2012. The outstanding principal plus interest as on February 7 stood at $708 million.
Ambani, in his defence, had informed the court that he was “unable to raise any finance from external sources” including from family members and also claimed reports that his brother Mukesh Ambani had personally paid $76 million on his behalf to Ericsson in connection with proceedings against RCom were “incorrect and misleading”.
“The value of Ambani’s investments has collapsed since 2012. The Indian telecom sector in particular has been dramatically hit by the Indian government’s change of policy in relation to the grant of spectrum,” his defence had said.