National Company Law Tribunal (NCLT) gave its approval to Jio for the acquisition of Reliance Infratel (RITL). The tribunal ask 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 6th November 2022, Jio had propose to deposit Rs 3,720 crore in an escrow account to complete the acquisition of Reliance Infratel which is undergoing an insolvency resolution process.
Mukesh Dhirubhai Ambani-led Jio place a bid of Rs 3,720 crore in November 2019 to acquire tower and fibre asset of debt-ridden subsidiary of his younger brother Anil Ambani-manage firm Reliance Communications.
The Committee of Creditors has already approve the resolution plan by Jio on 4th March, 2020 with a 100% vote.
As per application move 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 issuance of ‘no dues’ certificate, implementation of the resolution plan is delay.
“Such delay is causing severe harm to the interest of the corporate debtor (Reliance Infratel) as well as the resolution applicant (Jio),” submit before NCLT last month.
Jio said the delay in acquisition of RITL assets due to inter-creditor disputes will deteriorate the value of assets.
RITL has fibre assets of around 1.78 lakh route kilometers and 43,540 mobile towers across India.
RITL is the holding company for tower and fibre assets of RCOM.
Reliance Project & property Management Services Limited, the successful resolution applicant for Reliance Infratel (RITL), had move a fresh application in the NCLT Mumbai to complete the acquisition process.
The funds will be distribute amongst the lenders once the inter-creditor dispute over the distribution of resolution funds is settle.
SBI and a few other banks, including Doha Bank, Standard Chartered Bank, and Emirates Bank, are engage in a legal battle over the distribution of funds.
The matter is pending before the Supreme Court.
Doha Bank had challenge the classification of claims from the indirect creditors of RITL as the financial creditors by the resolution professional.