Jio’s acquisition of Reliance Infratel: Not a done deal yet

The National Company Law Tribunal (NCLT) has given its go-ahead to Reliance Jio to implement the resolution plan for Reliance Infratel, but it is not yet a done deal, it seems.

The Mumbai bench of the NCLT recently allowed the Reliance Jio (resolution applicant) to deposit the ‘total resolution amount’ in an account with State Bank of India and directed that upon such deposit, the resolution plan shall stand implemented and the Resolution Applicant shall acquire the ownership and control of RITL in terms of Resolution Plan. The tribunal also directed the monitoring committee and members of the erstwhile COC of RITL to take all steps to implement the resolution plan.

But there’s a catch in NCLT’s direction to the financial creditors to provide ‘no dues certificates’ to the Reliance Jio (resolution applicant) in accordance with express terms of the resolution plan. Though NCLT has allowed Reliance Jio’s request for issuance of no-dues certificate, but it has done so with the modification that the no-dues certificates may be issued by the creditors, pursuant to the orders passed by the Hon’ble Supreme Court in respect of the pending disputes between creditors of RITL regarding their status as ‘financial creditors’.

The implementation of the resolution plan of Reliance Infratel has remained pending owing to certain ongoing disputes among the creditors regarding their status as ‘financial creditors’.

Also, while the NCLT has given a go-ahead to implementation of resolution plan of Reliance Jio, it has done so only orally, and the same is subject to review of the written order in respect of the same, which is yet to be published on the website of the Hon’ble NCLT.

The resolution plan of Reliance Jio for acquisition of Reliance Infratel was approved by the NCLT on 3 December 2020 after the plan was approved by 100% of the members of the Committee of Creditors on 4 March 2020. As per the resolution plan, Reliance Jio would pay Rs. 4,500 crore to acquire assets of a debt-ridden subsidiary of his brother Anil Ambani’s firm Reliance Communications. Reliance Infratel owed over Rs 41,000 crore to creditors.

Also see: NCLT approves Jio’s Rs 3,720-crore bid for Reliance Infratel