The National Company Law Tribunal (NCLT) gave its approval to Jio for the acquisition of Reliance Infratel (RITL). The tribunal asked Jio to deposit Rs 3,720 crore in the State Bank of India (SBI) escrow account to complete the acquisition of RCOM’s tower and fibre assets.
On November 6, Jio had proposed to deposit Rs 3,720 crore in an escrow account to complete the acquisition of Reliance Infratel which is undergoing an insolvency resolution process.
Billionaire Mukesh Dhirubhai Ambani-led Jio placed a bid of Rs 3,720 crore in November 2019 to acquire tower and fibre assets of a debt-ridden subsidiary of his younger brother Anil Ambani-managed firm Reliance Communications.
The Committee of Creditors has already approved the resolution plan by Jio on March 4, 2020, with a 100 percent vote.
According to an application moved by Reliance Projects and Property Management Services, a subsidiary of Jio, due to the pendency of the proceedings over the distribution of the amount and the issuance of ‘no dues’ certificate, implementation of the resolution plan is delayed.
“Such delay is causing severe harm to the interests of the corporate debtor (Reliance Infratel) as well as the resolution applicant (Jio),” it submitted before NCLT last month.
Jio said the delay in the acquisition of RITL assets due to inter-creditor disputes will deteriorate the value of the assets.
RITL has fibre assets of around 1.78 lakh route kilometres and 43,540 mobile towers across the country.
RITL is the holding company for the tower and fibre assets of RCOM.
Reliance Project & property Management Services Limited, the successful resolution applicant for Reliance Infratel Ltd (RITL), had moved a fresh application in the NCLT Mumbai to complete the acquisition process.
The funds will be distributed amongst the lenders once the inter-creditor dispute over the distribution of resolution funds is settled.
SBI and a few other banks, including Doha Bank, Standard Chartered Bank, and Emirates Bank, are engaged in a legal battle over the distribution of funds.
The matter is pending before the Supreme Court.
Doha Bank challenged the classification of claims from the indirect creditors of RITL as financial creditors by the resolution professional.