Reliance Jio Infocomm’s (RJio) has completed the acquisition of Reliance Infratel (RITL), with the company helmed by billionaire Mukesh Ambani depositing Rs 3,720 crore in an SBI escrow account.
The funds deposited in an escrow account would be distributed among the lenders after settling creditors’ disputes and closure of the resolution process. “The transaction is now deemed to be complete,” sources close to the development said.
RITL, a subsidiary of beleaguered Reliance Communications (RCom), owns fibre assets of about 178,000 km route and nearly 43,540 mobile towers.
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However, an inter-creditor dispute pending before the Supreme Court is likely to delay the distribution of the resolution funds, even though it is highly unlikely to have any impact on the insolvency process. A number of banks including State Bank of India
These issues include a challenge by Doha Bank, which had accused the resolution professional of classifying indirect creditors as financial creditors.
Earlier in November 2022, the National Company Law Tribunal (NCLT) approved a proposal by RJio to acquire RITL, a move that would result in completion of debt-laden firm’s resolution process. The bankruptcy court had 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. 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.
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, Reliance Projects emerged as the successful resolution applicant. The committee of creditors (CoC) approved the resolution plan in March 2020.
However, the process was halted in November 2020, after SBI, Union Bank of India and Indian Overseas Bank
On its part, RJio had sought the details of the fraud tag and its removal prior to closing the deal. However, the lenders were of opinion that tag would be removed after RJio completes the acquisition.