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The National Company Law Tribunal (NCLT) has finally permitted Reliance Projects and Property Management Services (RPPMS), a subsidiary of Reliance Jio, for its proposed plan of acquiring Reliance Infratel, a subsidiary of Reliance Communications.
Reliance Infratel Limited (RITL) is the holder of all the tower and fiber assets (over 40,000 mobile towers and 1 lakh route kilometers of fiber assets) of Reliance Communications, the debt-laden company run by Anil Ambani, brother of Indian billionaire Mukesh Ambani.
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Troubles of Reliance Communications and its two subsidiaries, RITL & Reliance Telecom, began in May 2018 when they failed to pay debts worth Rs 46,000 crores! In 2020, RPPMS emerged as the winning bidder for RITL with a bid of Rs 3,720 crores.
The Committee of Creditors approved the resolution plan submitted by RPPMS in March 2020 with a 100% vote! The same was also approved by the NCLT in December 2020.
However, the plans were derailed when SBI, Indian Overseas Bank, and Union Bank of India labeled the account of RITL as a 'fraud account' after conducting a forensic audit.
Reliance Jio and four financial institutions, including Chinese banks, had appealed to the NCLT to speed up the approval process since all interested parties were facing troubles due to the constant delays.
As such, the NCLT has finally approved the resolution plan provided and paved the way for the successful acquisition of RITL by RPPMS. Pursuant to the proposed plan, the NCLT has asked Reliance Jio to deposit the bid amount in an SBI escrow account to complete the acquisition.
Reliance Jio is currently an unlisted company whose IPO is expected to hit the markets in a few years.
Article by Aman Agarwal.
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