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Doha Bank moves NCLT to seek stay on RITL CoC decision

The counsel for Doha Bank claimed that the creditors' panel has considered the claims of lenders of parent firm Reliance Communications on the basis of corporate guarantee of RITL which would reduce its voting share in the CoC.

twitter-logo PTI        Last Updated: May 31, 2019  | 12:38 IST
Doha Bank moves NCLT to seek stay on RITL CoC decision
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Doha Bank Thursday approached the National Company Law Tribunal (NCLT) to seek stay on a decision of the committee of creditors (CoC) of Reliance Infratel (RITL).

The counsel for Doha Bank claimed that the creditors' panel has considered the claims of lenders of parent firm Reliance Communications on the basis of corporate guarantee of RITL which would reduce its voting share in the CoC.

The counsel claimed to be direct lenders and said as a syndicate of four banks, it had lent Rs 1,400 crore to RITL.

Doha Bank is against considering lenders having corporate guarantee of RITL as financial creditors as this will marginalise their voting rights to 15 per cent from around 55 per cent currently, he claimed.

The counsel claimed that Doha Bank and three other banks are direct lenders giving Rs 1,400 crore, while State Bank of India gave Rs 900 crore and Rs 300 crore was given by operational creditors, taking the total to Rs 2,600 crore.

After Reliance Communications defaulted on payments, its lenders invoked corporate guarantees given by RITL and converted into debt, the counsel said.

So, with corporate guarantee of Rs 8,000 crore the overall amount will go up to Rs 10,600 crore, he claimed.

The NCLT bench headed by V P Singh and Ravikumar Duraisamy kept the matter for hearing on Friday.

On May 15, the Mumbai bench of NCLT had admitted an insolvency petition filed by Ericsson against Reliance Communications and two of its subsidiaries, RITL and Reliance Telecom (RTL), seeking to recover unpaid dues.

Ericsson, which had signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide telecom network, had alleged that it had not been paid the dues.

In September 2017, the Swedish company had filed a petition in the NCLT's Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that Reliance Communications allegedly owes it.

According to the company website, Reliance Communications and its two subsidiaries, RITL and RTL, owe over Rs 6,700 crore to financial creditors.

Also read: NCLT approves Tata Steel's Rs 800 crore bid to acquire Bhushan Energy

Also read: Sensex ends 247 points down, Nifty at 11,861; JSW Steel, SBI Bank, Tata steel worst performers

 

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