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The National Company Law Tribunal (NCLT) on Monday gave approval to Reliance Jio subsidiary Reliance Projects and Property Management Services to acquire Reliance Infratel (RITL) which owns tower and optical assets of Reliance Communications.
NCLT asked Jio to deposit ₹3,720 crore in the State Bank of India (SBI) escrow account to complete the acquisition of RCOM’s tower and fiber assets.
Earlier this month, Jio had moved a tribunal to expedite the acquisition of Reliance Infratel.
He asked the Tribunal to allow him to “deposit the total resolution amount into an account with SBI” and direct the parties involved “that after such deposit the resolution plan shall remain in place and the petitioner shall acquire ownership and control of RITL in terms of the resolution plan”.
On November 6, Jio proposed escrow ₹3,720 million in an escrow account to complete the purchase of RITL, which is in the process of insolvency resolution.
Jio bids to buy RCom assets
Back in November 2019, billionaire Mukesh Ambani-led Jio made a bid for ₹$3,720 million to buy the tower and fiber assets of his younger brother Anil Ambani’s debt-ridden subsidiary, which is run by Reliance Communications.
The committee of creditors has already approved Jio’s resolution plan on March 4, 2020 with 100 percent votes.
According to the application filed by Reliance Projects and Property Management Services, a subsidiary of Jio, due to the irregularity in the process of distributing the amount and issuing the “no-obligation” certificate, the implementation of the resolution plan has been delayed.
“Such delay causes serious prejudice to the interests of the corporate debtor (Reliance Infratel) as well as the resolution petitioner (Jio),” the NCLT submitted last month.
Jio said the delay in acquiring RITL’s assets due to inter-creditor disputes will worsen the value of the assets.
RITL has optical assets of about 1.78 million route kilometers and 43,540 mobile towers across the country.
RITL is the holding company for RCOM’s tower and optical assets.
Reliance Project & properti Management Services Limited, the successful applicant for resolution of Reliance Infratel Ltd (RITL), has moved a fresh application at NCLT Mumbai to complete the acquisition process.
The funds will be distributed among the lenders when the intercreditor dispute over the distribution of the settlement funds is resolved.
SBI and banks including – Doha Bank, Standard Chartered Bank and Emirates Bank – are embroiled in a legal battle over the allocation of funds.
The matter is pending before the Supreme Court.
Doha Bank contested the resolution professional’s classification of claims against RITL’s indirect creditors as financial creditors.
With input from the agency
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