Reliance Jio Receives NCLT Approval to Acquire Reliance Infratel
In November 2019, Reliance Jio made a Rs 3,720 crore bid to acquire the debt-ridden RITL’s tower and fiber assets.
The National Company Law Tribunal (NCLT) approved Jio’s acquisition of Reliance Infratel on Monday.
The tribunal ordered Jio to deposit Rs 3,720 crore in an escrow account at the State Bank of India (SBI) to complete the acquisition of RCOM’s tower and fiber assets.
On November 6, Jio proposed depositing Rs 3,720 crore in an escrow account to complete the acquisition of Reliance Infratel, which is in insolvency.
In November 2019, billionaire Mukesh Dhirubhai Ambani-led Jio made a Rs 3,720 crore bid to acquire the debt-ridden subsidiary of his younger brother Anil Ambani-managed firm Reliance Communications.
The Committee of Creditors unanimously approved Jio’s resolution plan on March 4, 2020.
According to an application filed by Reliance Projects and Property Management Services, a subsidiary of Jio. The implementation of the resolution plan has been delay due to the pending proceedings over the distribution of the amount and the issuance of a ‘no dues’ certificate.
“Such delay is causing severe harm to the interests of the corporate debtor (Reliance Infratel). As well as the resolution applicant (Jio,” it said in a filing last month with the NCLT.
Jio stated that the delay in acquiring RITL assets due to inter-creditor disputes would reduce asset value.
RITL has 1.78 lakh route kilometers of fiber assets also 43,540 mobile towers spread across the country. RITL is RCOM’s holding company for its tower and fiber assets.
The successful resolution applicant for Reliance Infratel (RITL), Reliance Project & Property Management Services Limited. That had filed a new application in the NCLT Mumbai to complete the acquisition process. Once the inter-creditor dispute over the resolution funds is resolved, the funds will be distribute among the lenders.
SBI and a few other banks, including Doha Bank, Standard Chartered Bank. Also Emirates Bank, are fighting over the distribution of funds in court.
The case is currently before the Supreme Court.
Doha Bank had challenged the resolution professional’s classification of claims from RITL’s indirect creditors as financial creditors.
