Under the order, the settlement applicant, in this case Reliance Digital, has proposed to pay Rs 3,720 crore for the corporate debtor (Reliance Infratel). The money will be distributed among lenders to the tower arm of Reliance Communications, the bankrupt and now defunct telecommunications company of the Reliance Group led by Anil Ambani.
In addition to this, the lenders are likely to get another Rs 800 million from the sale of a parcel of land held by Reliance Realty, which is also part of the Reliance Group led by Anil Ambani. But if Reliance Realty cannot obtain Rs 800 crore for the land, the resolution applicant will buy it for Rs 800 crore and distribute the amount to the lenders on a pro rata basis, depending on the judgment.
The resolution plan also includes an injection of funds of up to Rs 450 crore, which can be used as working capital to address urgent improvements and repairs at the tower company. In addition to these, the resolution seeker or his affiliate or nominee would subscribe for capital shares of Reliance Infratel worth Rs 5 crore.
“The amount that the resolution applicant intends to infuse (RA) will be kept in an interest-bearing deposit in any nationalized bank until the disposition of said requests,” the order says.
Reliance Digital, led by Mukesh Ambani, had outbid asset rebuilding company UVARCL, Bharti Airtel and VFSI Holdings for Reliance Infratel.
The order said Infratel would remain “a going concern.”
“The RA will leverage Reliance Industries Group’s proven track record of ‘best-in-class project execution’ to ensure infrastructure upgrades. The corporate debtor will also benefit from the scale and efficiency already enjoyed by leading companies in India, “said the NCLT order.
The next step will be regulatory approvals, which will include one from the Reserve Bank of India, as payments to global lenders such as the Industrial and Commercial Bank of China (ICBC) are involved, according to people in the know.
However, Reliance Infratel lenders will have to make a significant haircut on your outstanding loans. Some 13 of Infratel’s top lenders had claimed Rs 12,687.65 crore, of which Rs 9,665.07 crore of claims were admitted. They include State Bank of India (Rs3,628.68 crore), Syndicate Bank (Rs 1,225.18 crore) and Bank of India (Rs 1,064.82 crore), in addition to ICBC (Rs 1,832.91 crore). There are many other financial creditors who have filed their claims.
Resolution plans for RCom and subsidiary Reliance Telecom are still pending with the NCLT. Under the plans approved by the lenders, RCom and its units will go to asset rebuilding company UVARCL. The total consideration of Rs 20,000-23,000 crore, including the Reliance Infratel resolution, would be paid over a seven-year period.
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