Jio receives approval from NCLT to purchase debt-ridden Infratel Reliance
- ByStartupStory | November 22, 2022
Reliance After months of litigation and delays, Jio has received National Company Law Tribunal (NCLT) approval to purchase Reliance Infratel. On Monday, the Mumbai Bench of the NCLT approved Jio’s request to deposit the $3,720 billion resolution payment in an account with the State Bank of India (SBI).
In response to Jio’s application on October 20, the order was passed. Jio may now finally finalize the acquisition of Reliance Infratel’s tower and fiber companies thanks to the insolvency court’s consent.
Infratel has 43,540 mobile towers and 178,000 route kilometers of fiber assets spread out over the nation. In May 2019, new insolvency procedures were launched against Reliance Communications (RCom) and its two subsidiaries. Resolution plans for RCom and its two subsidiaries, Reliance Jio and UV Asset Reconstruction Company (UAVRCL), were approved by the committee of creditors in March 2020.
The preferred bidder for Reliance Infratel was Jio, which has towers and fiber-optic assets. Additionally, the spectrum-holding offer from UAVRCL was chosen for RCom and Reliance Telecom. The NCLT gave its approval to Reliance Infratel’s resolution plan in December 2020. However, difficulties were encountered during implementation for a number of reasons, including the labeling of some RCom accounts as “fraud” as a result of forensic examinations.
Jio claimed in October that ongoing inter-creditor conflicts had caused additional delays in the plan’s execution. Additionally, this presented a risk that Infratel’s assets would lose value. A legal dispute over money distribution is currently going on between SBI and a few other banks, notably Doha Bank, Standard Chartered Bank, and Emirates Bank. The Supreme Court is now deliberating the case.
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