Mukesh Ambani-owned telecom operator Jio has said that the National Company Law Tribunal (NCLT) has approved its acquisition proposal to take over Anil Ambani-owned Reliance Infratel (RITL). The order was passed in response to Jio’s October 20 application.
In November 2019, Ambani placed a bid of Rs 3,720 crore to acquire tower and fibre assets of the debt-ridden subsidiary of his younger brother Anil Ambani-managed firm Reliance Communications. Insolvency proceedings against Reliance Communications (RCom) and its two subsidiaries started in May 2019. RITL is the holding company for the tower and fibre assets of RCom. Infratel has fibre assets of 178,000 route kilometres and 43,540 mobile towers spread across the country. Jio, which is rolling out its 5G network across India, has been keen on taking over Infratel's infrastructure for its operations.
On Monday, November 21, 2022, the Mumbai bench of the tribunal asked the telecom company to deposit Rs 3,720 crore in the State Bank of India (SBI) escrow account to complete the acquisition process of RCOM's tower and fibre assets.
Earlier this month, the company had moved the National Company Law Tribunal asking for a speedy trial for the acquisition of Reliance Infratel, a PTI report stated. It insisted that it should be allowed to “deposit the total resolution amount in an account with SBI" and direct the parties involved, “that upon such deposit, the resolution plan shall stand implemented and the applicant shall acquire ownership and control of RITL in terms of the resolution plan".
On November 6, Jio proposed to deposit Rs 3,720 crore in an escrow account to complete the acquisition process.
RCom’s assets and Jio’s takeover bid
After Jio placed a takeover bid of Rs 3,720 crore to acquire tower and fibre assets of RCom, the Committee of Creditors in 2020 approved the resolution plan laid by the company with a 100 per cent vote.
In its application to NCLT earlier this month, Jio noted that the delay in the acquisition of RITL assets due to inter-creditor disputes will deteriorate the value of assets, the PTI report said.
Jio's subsidiary Reliance Project & Property Management Services Limited, the successful resolution applicant for Reliance Infratel Ltd (RITL), had moved a fresh application to 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 banks including – Doha Bank, Standard Chartered Bank, and Emirates Bank – are engaged in a legal battle over the distribution of funds. The matter is now pending before the Supreme Court of India.
Doha Bank had challenged the classification of claims from the indirect creditors of RITL as the financial creditors by the resolution professional.
(With PTI inputs)
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