Jio gets NCLT nod to acquire Reliance Infratel | The Financial Express

Jio gets NCLT nod to acquire Reliance Infratel

In October this year, RJio also proposed to deposit the resolution amount in an escrow account, asking the tribunal to expedite RITL’s insolvency process

Jio gets NCLT nod to acquire Reliance Infratel
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In a move that would result in the closure of Reliance Infratel’s (RITL) insolvency process, the National Company Law Tribunal (NCLT) has approved Mukesh Ambani-led Reliance Jio Infocomm’s (RJio) proposal to complete the resolution process of the debt-laden firm. The bankruptcy court has also asked RJio to deposit the total resolution amount of Rs 3,720 crore in an escrow account.

In November 2019, RJio, through its subsidiary Reliance Projects and Properties Management Services (RPPMS), had placed a bid to acquire the tower and fibre assets of RITL, the holding company of debt-laden Reliance Communications (RCom). RITL has fibre assets of about 1.78-lakh route km and 43,540 mobile towers.

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Later in March 2020, Reliance Projects was adjudged the winning bidder.

In October this year, RJio also proposed to deposit the resolution amount in an escrow account, asking the tribunal to expedite RITL’s insolvency process. In its interlocutory application filed before the tribunal, the company stated that a delay was causing “severe harm” to the interests of corporate debtors and the resolution applicant.

The company had also sought that the tribunal direct the monitoring committee and respondents to take all steps to implement the resolution plan.

The funds to be deposited in an escrow account would be distributed among the lenders after settling creditors’ disputes and closure of the resolution process.

However, an inter-creditor dispute pending before the Supreme Court is likely to delay the distribution of the resolution funds, even though it might not impact the insolvency process. A number of banks, including State Bank of India, Doha Bank, Standard Chartered Bank and Emirates Bank are part of the legal battle. These issues include a challenge by Doha Bank, which had accused the resolution professional of classifying indirect creditors as financial creditors.

In May 2018, RCom’s Indian lenders referred the company and its subsidiaries – RITL and Reliance Telecom – to NCLT, after the firm, then controlled by Anil Ambani, failed to pay dues worth Rs 46,000 crore. Later in 2020, with a bid of Rs 4,000 crore, RPPMS emerged as the successful resolution applicant. The committee of creditors (COC) approved the resolution plan in March 2020.

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However, the process came to a halt in November 2020, after SBI, Union Bank of India and Indian Overseas Bank tagged RITL as a “fraud account” following a forensic audit. Later in May 2021, Reliance Projects moved the NCLT, asking it to direct the lenders to share the audit report terming the accounts as fraudulent was not disclosed before the NCLT.

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First published on: 22-11-2022 at 12:30:00 am
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