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Kolkata: The Reliance Infratel (RTIL) bankruptcy resolution may be finally headed for a close after two years.
A Reliance Jio Infocomm arm has recently moved a fresh application in the National Company Law Tribunal (NCLT) Mumbai, offering to deposit the total resolution sum of Rs 3,500 crore in a State Bank of India (SBI) escrow account to acquire RTIL, which houses the tower and fibre assets of bankrupt telco, Reliance Communications (RCom).
Jio’s unit, Reliance Projects & Property Management Services Ltd (RP&PMSL), in a petition dated October 20, 2022, has told the tribunal that the continuing inter-creditor disputes around distribution of the resolution funds is delaying the take over of RCom’s tower/fibre assets and also deteriorating their value. The Jio unit is the resolution applicant for RTIL.
The likes of SBI and other lenders, 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.
Accordingly, Jio has urged NCLT-Mumbai to issue directions to RTIL’s financial creditors to provide the necessary no-dues-certificate to it to speed up the much-delayed RTIL bankruptcy resolution process.
“In view of pendency of proceedings before the Supreme Court, and other inter creditor disputes pertaining to distribution of the resolution amount and issuance of no-dues certificates, the implementation of the resolution plan is being delayed, causing severe harm to the interests of the corporate debtor (read: RTIL) and the resolution applicant,” Jio’s arm said in its petition, a copy of which was seen by ET.
It added that such delays threatened to “deteriorate the value” of RTIL’s tower and fibre assets, if urgent action is not taken by the tribunal towards implementation of the resolution plan. Jio did not reply to ET’s queries as the matter is sub judice. Queries to RCom also went unanswered.
Jio’s arm, in fact, has called on NCLT-Mumbai to issue directions that would pave the way for RP&PMSL to acquire ownership and control of Reliance Infratel once the resolution sum is deposited in the SBI escrow account. “Rule 11 of NCLT Rules, 2016, provide powers to the tribunal to pass any orders as necessary for meeting the ends of justice.”
In its petition, Jio arm’s has also said that on payment of the resolution sum, it should be discharged from its obligations, and all that would remain would be the inter-se distribution among RTIL’s creditors, subject to the outcome of the legal proceedings in the apex court.
Plans to sell RCom’s tower and underground fibre assets—housed under RTIL—to the Jio arm have been in limbo since SBI declared Reliance Infratel’s accounts as fraudulent. That had led to Jio filing an application seeking the forensic audit reports on which the accounts were declared fraudulent. SBI had since removed the fraudulent tag from RITL accounts.
Analysts and industry executives say the value of the towers are depreciating over time, especially if not maintained. A senior executive had said some of the towers have fallen into rust and are unviable for use before a thorough repair while some may even have to be re-erected.
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