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NCLT green lights Jio’s acquisition of debt-ridden Reliance Infratel

NCLT green lights Jio’s acquisition of debt-ridden Reliance Infratel

The National Company Law Tribunal (NCLT), responsible for resolving matters relating to Indian companies, has reportedly approved Mukesh Ambani’s Jio to take over the tower and fiber asset of Reliance Infratel Ltd.

As per reports, the tribunal asked the telecom giant to deposit Rs 3,720 crore ($40 billion) in the escrow account of the State Bank of India (SBI) for completing the acquisition.

Earlier this month, Jio proposed depositing the aforementioned amount in an escrow account for the takeover of Reliance Infratel, currently going through a resolution process for insolvency.

Back in November 2019, Jio placed a bid of Rs 3,720 crore ($40 billion) to acquire the tower and fiber asset of Anil Ambani-managed Reliance Communications’ debt-ridden subsidiary.

The resolution plan has been already approved unopposed by the Committee of Creditors in March 2020.

As per an application moved by Jio subsidiary Reliance Projects and Property Management Services, implementation of the resolution plan was delayed as proceedings regarding the distribution of the amount and no-dues certificate were still pending.

The application, submitted to NCLT last month, further said that the delay was causing serious harm to the interest of Reliance Infratel, the corporate debtor, and Jio, the applicant of the resolution.

Jio said that the delay in acquiring RTIL assets because of inter-creditor disputes will lead to a deterioration in the valuation of the assets.

The Reliance Communications subsidiary has 43,540 mobile towers and fiber assets worth nearly 1.78 lakh route kilometers across India, being the holding company fiber and tower assets of RCOM.

Reliance Project & Property Management Services Limited submitted a new application to NCLT Mumbai for completing the takeover process.

After the inter-creditor dispute regarding the distribution of resolution is resolved, the distribution will take place amongst the lenders, which include SBI, Emirates Bank, Standard Chartered Bank, and Doha Bank.

Among them, Doha Bank had earlier challenged the categorization of claims, as made by the indirect creditors of Reliance Infratel as the financial lenders by the resolution professional.  

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.