PremiumNEW DELHI: A subsidiary of billionaire Mukesh Ambani's Reliance Jio has deposited ₹3,720 crore in an escrow account to acquire assets of Reliance Infratel. The move follows the National Company Law Tribunal's approval and directions issued last month.
According to people in the know, the India's largest carrier has deposited the amount in an escrow account with the State Bank of India as of Thursday.
With this, Jio will have completed the acquisition of Anil Ambani-managed Reliance Communications' tower and fibre assets that were housed under Reliance Infratel. The assets include over 43,500 towers and over 170,000 km of fibre.
Reliance Projects and Property Management Services, a unit of Reliance Jio, had moved a fresh petition at the Mumbai bench of National Company Law Tribunal (NCLT) on 6 November to complete the acquisition of Reliance Infratel.
The Jio subsidiary had proposed to deposit ₹3,500 crore in an escrow account to be distributed among creditors once the inter-creditor disputes over the distribution of funds are resolved.
Reliance Projects had said the delay in implementing the resolution plan was leading to deterioration of the assets of Reliance Infratel.
It had sought the tribunal’s permission to “deposit the total resolution amount in an account with SBI (State Bank of India)", and asked the court to direct the parties involved “that upon such deposit, the resolution plan shall stand implemented and the applicant shall acquire ownership and control of Reliance Infratel in terms of the resolution plan."
The company haadded that “the value of the assets of the corporate debtor (Reliance Infratel) will deteriorate if urgent action is not taken towards implementation."
Reliance Infratel is undergoing liquidation.
Reliance Projects had placed a bid of ₹4,000 crore for the company in November 2019. The NCLT approved the proposal on 21 November.
In November 2020, State Bank of India, Union Bank of India and Indian Overseas Bank tagged had Reliance Infratel as a “fraud account" following a forensic audit. The bankers’ committee approved Reliance Project’s resolution plan of creditors in December 2020. However, SBI and a few other banks, including Doha Bank, Standard Chartered Bank, and Emirates Bank, are engaged in a legal battle over the distribution of funds. The matter is pending before the Supreme Court.
Doha Bank had challenged the classification of claims from the indirect creditors of Reliance Infratel.
All banks, including China Development Bank, Export-Import Bank of China, Shubh Holdings Pte and SC Lowy Asset Management, had been made a party to the petition. The Chinese entities had written to finance minister Nirmala Sitharaman and the Insolvency and Bankruptcy Board of India earlier this year, seeking their intervention to speed up Reliance Infratel’s resolution process.