The National Company Law Tribunal on Thursday approved a resolution plan of Reliance Infratel following which lenders may get around Rs 4,400 crore and Reliance Jio may pick up the assets of the debt-ridden telecom infrastructure company.
The National Company Law Tribunal on Thursday approved a resolution plan of Reliance Infratel following which lenders may get around Rs 4,400 crore and Reliance Jio may pick up the assets of the debt-ridden telecom infrastructure company, according to sources. Reliance Jio through its subsidiary placed bids to acquire assets of Reliance Communications’ fully owned subsidiary Reliance Infratel which has been approved by the tribunal as part of the resolution plan, a source aware of the development told PTI.
“The lenders will get around Rs 4,400 crore from Reliance Digital Platform, a group company of Reliance Jio and the successful resolution applicant,” the source said. Under the approved resolution plan approved by lenders, RCom and its subsidiary Reliance Telecom Infrastructure Ltd (RTIL) will go to UV Asset Reconstruction Company (UVARCL), while the tower unit Reliance Infratel will go to Jio for a total consideration of Rs 20,000-23,000 crore to be paid over a period of seven years.
Reliance Infratel, which has around 43,000 towers and 1,72,000 route kilometres fiber, is going through insolvency proceedings at the Mumbai bench of NCLT. Resolution Plan was approved by 100 per cent votes of the committee of creditors. “Distribution of the proceeds from resolution plan is subject to the disposal of the Doha Bank Intervention Application,” the source said. Email sent to the resolution professional of Reliance Infratel did not receive any immediate reply.
RCom’s overall debt is estimated to be around Rs 46,000 crore when the company had filed for bankruptcy with around 53 financial creditors submitting their claims that included domestic banks, foreign banks, non-banking financial companies and funds. Besides the banks, operational creditors like the tower companies, equipment vendors and the telecom department have claimed nearly Rs 30,000 crore in dues, of which over Rs 21,000 crore has been verified.
RCom was forced to shut its wireless operations late 2017, hurt by mounting debt and and widening losses amid intense competition in the telecom sector after Jio’s entry in September 2016. It tried to sell its wireless assets, such as spectrum and towers, to Jio, but failed due to a slew of legal cases. This forced the telco and its units to opt for insolvency proceedings, which was admitted under the IBC in May 2019.