India: NCLT okays Jio’s resolution plan for Reliance Infratel

FILE PHOTO: Commuters are reflected on an advertisement of Reliance Industries' Jio telecoms unit, at a bus stop in Mumbai, India, February 21, 2017. REUTERS/Shailesh Andrade/File Photo

A bankruptcy court on Thursday approved Reliance Jio Infocomm Ltd’s resolution plan for Reliance Infratel Ltd, in some relief for lenders who stand to receive about ₹4,400 crore for its tower and fibre assets.

Reliance Infratel is a unit of bankrupt Reliance Communications Ltd (RCom). Reliance Jio, owned by Asia’s richest man Mukesh Ambani, had bid for only this subsidiary of RCom.

The distribution of proceeds under the National Company Law Tribunal (NCLT) resolution plan is still subject to the disposal of an intervention application filed by Doha Bank, one of the lenders to Reliance Infratel. Doha Bank has contested that its voting rights and outstanding dues have been reduced by the committee of creditors.

According to the plan approved by lenders, RCom and its subsidiary, Reliance Telecom Infrastructure Ltd will go to UV Asset Reconstruction Co. Ltd while the tower unit, Reliance Infratel, will go to Jio. The total consideration under this resolution plan of ₹20,000-23,000 crore will be paid over seven years.

Reliance Industries, the parent of Jio, did not immediately reply to a query seeking comment.

China Development Bank, Life Insurance Corp of India, State Bank of India, Exim Bank of China and Bank of Baroda are among 41 creditors to the bankrupt telecom firm.

According to information available on RCom’s website, it owed financial creditors ₹49,193 crore. Besides, Reliance Telecom and Reliance Infratel owe financial creditors ₹24,306.27 crore and ₹12,687.65 crore, respectively. RCom thus owes debtors ₹86,188 crore at a consolidated level. This is besides the ₹28,837 crore it owes the department of telecommunications in spectrum dues and other charges as well as dues to operational creditors.

While the NCLT approval paves the way for the sale of physical assets of RCom, legal clarity is awaited on sale of spectrum airwaves under the Insolvency and Bankruptcy Code (IBC). After the top court asked the Centre in August how it plans to recover adjusted gross revenues from bankrupt telcos (such as Aircel and Videocon), DoT objected to the sale of RCom’s spectrum to UV ARC. If the resolution plan by UV ARC is approved, DoT will recover little as under IBC, entities like DoT are operational creditors, second in line for dues after financial creditors.

This article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.