The bankruptcy tribunal has approved billionaire Mukesh Ambani-led Reliance Jio’s plan to acquire younger brother Anil Ambani’s debt-laden Reliance Infratel Ltd, a person privy to the development said.
The Mumbai bench of the National Company Law Tribunal cleared the proposal by Reliance Digital Platform & Digital Services Ltd for Reliance Infratel on Thursday, the person said, asking not be named.
Reliance Digital is a unit of Reliance Industries Ltd and part of its Jio telecom business. Reliance Infratel houses the tower and fibre assets of Anil Ambani group’s Reliance Communications Ltd (RCom), which is also in bankruptcy.
Reliance Infratel’s creditors are likely to receive Rs 4,400 crore as per the resolution plan, VCCircle has learnt.
The NCLT’s approval is subject to the disposal of Doha Bank’s intervention application, the person cited above said.
RCom’s creditors had dragged the company to bankruptcy court in 2018 after it defaulted on payments. In May 2018, the NCLT admitted the insolvency petition filed by Ericsson against RCom and its subsidiaries Reliance Infratel and Reliance Telecom Ltd. RCom later challenged the NCLT’s decision but withdrew its petition in April 2019.
In March this year, a committee of creditors led by State Bank of India approved Reliance Digital’s plan to acquire Reliance Infratel and UV Asset Reconstruction Company’s offer to buy RCom’s other assets. RCom owes its financial creditors around Rs 50,000 crore.
UV ARC’s plan is yet to be approved because of a regulatory hurdle. The Reserve Bank of India nixed the Delhi-based ARC’s resolution plan in August for another asset under the NCLT on the grounds that the SARFAESI Act doesn’t allow an ARC to acquire another company.
Reliance Infratel has 43,000 towers and 172,000 kilometre of fibre assets as well as data centres, which will be available for access to Jio.
Reliance Infratel earned total revenues of Rs 1,343 crore for 2019-20, compared with Rs 1,450 crore the previous year. It incurred a net loss after tax of Rs 66 crore for 2019-20, compared with a loss of Rs 132 crore the year before.
RCom’s other assets include airwaves in the 850 megahertz band in 14 of India’s 22 telecom circles.