Reliance Jio has secured National Company Law Tribunal (NCLT) nod to acquire Reliance Infratel after months of delay and litigation.
On Monday, the Mumbai Bench of NCLT allowed Jio’s application to deposit the resolution amount of Rs 3,720 crore in a State Bank of India (SBI) account.
The order was passed in response to Jio’s October 20 application. The insolvency court’s approval means that Jio can finally complete the acquisition of Reliance Infratel’s tower and fibre businesses.
Infratel has fibre assets of 178,000 route kilometres and 43,540 mobile towers spread across the country.
Insolvency proceedings against Reliance Communications (RCom) and its two subsidiaries began afresh in May 2019.
In March 2020, the committee of creditors had approved resolution plans submitted by Reliance Jio and UV Asset Reconstruction Company (UAVRCL) for RCom and its two subsidiaries.
Jio was the preferred bidder for Reliance Infratel (which has towers and optic fibre assets). And, UAVRCL’s bid was chosen for RCom and Reliance Telecom, which has spectrum.
In December 2020, the NCLT approved Reliance Infratel’s resolution plan. However, its implementation faced hiccups due to various reasons, including classification of certain RCom accounts as “fraud” following forensic audits.
In October, Jio submitted that the pendency of inter-creditor disputes had resulted in further delays in the plan’s implementation. And, this threatened to shrink the value of Infratel’s assets.
SBI and a few other banks, including Doha Bank, Standard Chartered Bank and Emirates Bank, are engaged in a legal battle over distribution of funds. The matter is pending before the Supreme Court.