PTIMUMBAI: The dedicated insolvency court has given its nod to Reliance Infratel’s (RITL) resolution plan, thereby paving way for Reliance Jio Infocomm (Jio) to pick up the tower and fibre assets of this bankrupt company.
Under the plan approved by National Company Law Tribunal (NCLT), lenders may recover under Rs 4000 crore through the resolution plan of Reliance Infratel,. This 100% subsidiary of Reliance Communications (RCom) holds 43,000 towers and and 1,72,000 km of fibre, a person familiar with the matter said.
"However, the NCLT Resolution plan distribution is subject to disposal of Doha Bank Intervention Application," the person added.
Another legal source added that although NCLT has accepted the plan, it has directed that the recovery money be put in interest bearing escrow account of a PSU bank .
Aneesh Nanavati of Deloitte was the resolution professional (RP)in this case while Sumit Kumar Khanna , partner and head of corporate finance and restructuring at Deloitte was advisor to RP
According to the complete plan approved by lenders, RCom and its subsidiary RTIL will go to UVARCL whereas the tower unit, Reliance Infratel, will go to Jio for a total consideration of Rs 20,000-23,000 crore to be paid over a period of seven years.
At the time of filing for bankruptcy, RCom had debt of Rs 46,000 crore, with 53 financial creditors — including local and foreign banks, non-banking financial companies and funds — laying claims.
Besides banks, operational creditors such as tower companies, equipment vendors and the telecom department have claimed nearly Rs 30,000 crore in dues, of which over Rs 21,000 crore has been verified.
RCom was forced to shut its wireless operations late 2017, hurt by mounting debt and widening losses amid intense competition in the telecom sector after Jio’s entry in September 2016.
It tried to sell its wireless assets, such as spectrum and towers, to Jio, but failed due to a slew of legal cases. This forced the telco, and its units, to opt for insolvency proceedings, which was admitted under the IBC in May 2019.
Under the plan approved by National Company Law Tribunal (NCLT), lenders may recover under Rs 4000 crore through the resolution plan of Reliance Infratel,. This 100% subsidiary of Reliance Communications (RCom) holds 43,000 towers and and 1,72,000 km of fibre, a person familiar with the matter said.
"However, the NCLT Resolution plan distribution is subject to disposal of Doha Bank Intervention Application," the person added.
Another legal source added that although NCLT has accepted the plan, it has directed that the recovery money be put in interest bearing escrow account of a PSU bank .
Aneesh Nanavati of Deloitte was the resolution professional (RP)in this case while Sumit Kumar Khanna , partner and head of corporate finance and restructuring at Deloitte was advisor to RP
According to the complete plan approved by lenders, RCom and its subsidiary RTIL will go to UVARCL whereas the tower unit, Reliance Infratel, will go to Jio for a total consideration of Rs 20,000-23,000 crore to be paid over a period of seven years.
At the time of filing for bankruptcy, RCom had debt of Rs 46,000 crore, with 53 financial creditors — including local and foreign banks, non-banking financial companies and funds — laying claims.
Besides banks, operational creditors such as tower companies, equipment vendors and the telecom department have claimed nearly Rs 30,000 crore in dues, of which over Rs 21,000 crore has been verified.
RCom was forced to shut its wireless operations late 2017, hurt by mounting debt and widening losses amid intense competition in the telecom sector after Jio’s entry in September 2016.
It tried to sell its wireless assets, such as spectrum and towers, to Jio, but failed due to a slew of legal cases. This forced the telco, and its units, to opt for insolvency proceedings, which was admitted under the IBC in May 2019.
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5 Comments on this Story
 | T R Balachandran2 hours ago anybody could have have fit the business... |
| Gaurav Gupta2 hours ago @nikhil exception provided by dear govt |
| Gaurav Gupta2 hours ago At 5% cost business sold to brother. Can happen only in India |