The National Company Law Tribunal (NCLT) has granted approval to the take over of Reliance Infratel Ltd (RITL) by Reliance Project and Property Management Services Ltd (RP&PMSL), a subsidiary of Reliance Jio that oversees the telco’s tower and fiber business. Jio will finalize the acquisition of insolvent Reliance Communications’ tower and fiber assets by depositing Rs 3,720 crore in an escrow account at the State Bank of India (SBI).
Jio, which is rolling out 5G networks beginning with metros and larger cities and requires all towers and fiber assets for the purpose, is depositing Rs 3,720 crore in an escrow account at the State Bank of India (SBI) to complete the acquisition of bankrupt Reliance Communications’ tower and fiber assets, according to people familiar with the matter.
RITL has 178,000 route kilometers of fiber and 43,540 mobile towers across the country. The order has not yet been uploaded.
Earlier this month, Jiohad requested that the NCLT expedite the acquisition of Reliance Infratel. The issue had been stalled because there was no agreement on how the monies acquired from the transaction would be allocated among the creditors, which included SBI, Emirates Bank, and Doha Bank. Jio has sought the NCLT-Mumbai to force RTIL’s financial creditors to submit the required ‘no dues certificate’ in order to expedite the much-delayed bankruptcy resolution process. Its argument was that it needed clear control of the Reliance Infratel assets as soon as possible.
In the Reliance Infratel bankruptcy resolution procedure, RP&PMSL was the resolution applicant. It has offered a resolution proposal in November 2019 comprising a payment of Rs 3,720 crore to buy the insolvent RCom company’s tower and fiber assets.
On March 4, 2020, a panel of creditors accepted the scheme. Before its most recent appeal, RP&PMSL also said that upon payment of the resolution sum, it should be released from its commitments, with only the inter-se distribution among RTIL’s creditors remaining, subject to the result of the legal procedures in the Supreme Court. With the current ruling, RP&PMSL gets the go-ahead to take over Reliance Infratel’s assets.
While one stage of the corporate insolvency procedures involving RCom has been completed, other issues remain unresolved. The spectrum owned by the bankrupt telecom is one of the essential assets in the process.
The corporation, however, is mired in a legal dispute over this, with the Department of Telecommunications arguing that because spectrum is a national resource, it cannot be sold as part of the insolvency procedures.
Furthermore, the company’s telecom license expired last year, denying it the ability to use the spectrum it controls. Analysts noticed that after the corporation loses the license to spectrum, the asset (spectrum) has little to no value.
Under the insolvency proceedings, Indian banks, suppliers, and other creditors have lodged claims against RCom totaling around Rs86,000 crore. Axis Trustee Services Ltd sold RComunit Globalcom IDC Ltd (GIDC) to a third party earlier this month for non-repayment of debts.
 has granted approval to the take over of Reliance Infratel Ltd (RITL) by Reliance Project){kind=link}