Reliance Infratel Resolution Plan: Jio May Get Assets, Lenders Rs 4,400 Crore
The NCLT has approved a resolution plan for Reliance Infratel.
On Thursday, the National Company Law Tribunal approved a resolution plan for Reliance Infratel Ltd. Lenders are likely get around Rs 4,400 crore and Reliance Jio some assets of the debt-laden telecom infrastructure firm, sources said.
Reliance Jio, through its subsidiary, had placed bids to acquire the assets of Reliance Infratel, a subsidiary of Anil Ambani’s Reliance Communications Ltd. The same has been approved by NCLT as part of the resolution plan, a source told PTI.
“The lenders will get around Rs 4,400 crore from Reliance Digital Platform, a group company of Reliance Jio and the successful resolution applicant,” the source said.
According to the resolution plan approved by the lenders, RCom and its subsidiary Reliance Telecom Infrastructure Ltd. will go to UV Asset Reconstruction Co. Ltd., while the tower unit Reliance Infratel will go to Reliance Jio for a total consideration of Rs 20,000-23,000 crore to be paid over a period of seven years.
Reliance Infratel, which has around 43,000 towers and 1,72,000 route kilometres fiber, was undergoing insolvency proceedings at NCLT Mumbai.
The resolution plan was approved by 100% votes of the committee of creditors.
"Distribution of the proceeds from resolution plan is subject to the disposal of the Doha Bank Intervention Application," the source said.
An email sent to Reliance Infratel's resolution professional for comment on the development did not receive any immediate reply.
RCom's overall debt was estimated at Rs 46,000 crore when the company had filed for bankruptcy. 53 financial creditors, including domestic banks, foreign banks, non-banking financial companies and funds, had submitted claims.
Besides the banks, operational creditors—like 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 in 2017, hurt by mounting debt and and widening losses amid intense competition in India’s telecom sector. It tried to sell its wireless assets, such as spectrum and towers, to Reliance Jio, but failed due to a slew of legal cases.
This forced the telecom and its units to opt for insolvency proceedings, which was admitted under the Insolvency and Bankruptcy Code in May 2019.