The National Company Law Tribunal (NCLT) in Mumbai Monday approved Reliance Infratel Ltd’s (RITL) acquisition by Reliance Project and Property Management Services Ltd (RP&PMSL), an arm of Reliance Jio that looks into the telco’s tower and fibre business, bringing the bankruptcy resolution of the Anil Ambani company to a close after two years. Jio, which is rolling out 5G networks starting with the metros and bigger cities and needs all the towers and fibre assets for the purpose, is to deposit Rs 3,720 crore in a State Bank of India (SBI) escrow account to complete the acquisition of bankrupt Reliance Communications’ tower and fibre assets, people familiar with the matter said. RITL has fibre assets of around 178,000 route km and 43,540 mobile towers across the country. The order hasn’t been uploaded yet.
Earlier this month, Jio had moved the NCLT to speed up the acquisition of Reliance Infratel. The matter had been stuck since there was no consensus on how the funds raised from the acquisition will be distributed among the creditors, which include the likes of SBI, Emirates Bank and Doha Bank. Jio had 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 bankruptcy resolution process. Its contention was that it wants a clear possession of the Reliance Infratel assets at the earliest. RP&PMSL was the resolution applicant in the Reliance Infratel bankruptcy resolution process. It had in November 2019 presented a resolution plan involving a payment of Rs 3, 720 crore to acquire the tower and fibre assets of the bankrupt RCom company. The panel of creditors had approved the plan on March 4, 2020.
In its latest petition, RP&PMSL had 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 Supreme Court.With the latest order, RP&PMSL now has the green signal to take over the assets of Reliance Infratel. While this step of the corporate insolvency proceedings around RCom may have been resolved, other aspects continue to be in a limbo.
One of the key assets in the process is the spectrum owned by the insolvent telco. However, the company is embroiled in a battle regarding this as the Department of Telecommunications has argued that since spectrum is a national resource, it cannot be sold as part of the insolvency proceedings.Additionally, the company’s telecom licence expired last year, which means it does not have the right to use the spectrum it owns. Once the company loses the right to spectrum, the asset (spectrum) has little to no value, analysts observed.
The Indian banks, vendors and other creditors have made claims of around Rs86,000 crore on RCom under the insolvency proceedings.
Earlier this month, RComunit Globalcom IDC Ltd (GIDC) was sold to a third party by Axis Trustee Services Ltd for non-repayment of loans.