Another Anil Ambani firm Reliance Broadcast Network faces insolvency proceedings
Reliance Broadcast Network Limited, the owner of Big FM radio station, will now face Corporate Insolvency Resolution Process (CIRP) after the Mumbai bench of the NCLT admitted an insolvency plea by IDBI Trusteeship Services Limited on behalf of L&T Investment Management Limited.
The insolvency petition was filed against Reliance Broadcast Network (corporate debtor) after it failed to clear financial debt of Rs 175 crore.
According to the plea filed by IDBI Trusteeship Services, Reliance Broadcast Network had executed a debenture trust deed on 10 August 2015 in favour of the former, wherein 1500 rated unlisted redeemable Non-Convertible Debentures (NCDs) were issued for a face value of Rs. 10,00,000 each aggregating to Rs. 150 crores in Series A, B and C.
L&T Investment Management had subscribed to NCD worth Rs 50 Crores in series C with a redemption date of 13 May 2020. Reliance Broadcast had also executed a Put Option Agreement dated 12 May 2015 along with Reliance Capital Limited (Corporate Guarantor) and the IDBI Trustee Services, for the purpose of entitling the investors/debenture holder to exit their investments in the NCDs either in full or in part.
Under the terms of the said agreement, Reliance Capital Limited (the purchaser) was under an obligation to purchase the NCDs from the investors on occurrence of Put Option Event. It is further stated that the Reliance Broadcast Network had also executed an unattested deed of Hypothecation dated 10 August 2015 and by a virtue of the said hypothecation, a charge was created in favour of the IDBI Trusteeship over the secured assets and the current account/ designated account of the corporate debtor.
Reliance Broadcast Network in 2016 issued Rs 150 crore worth of NCDs in two tranches of Rs 100 crore and Rs 50 crore. IDBI Trusteeship subscribed to the debentures in both the cases with Reliance Capital being the corporate guarantor.
On redemptions dates when the corporate debtor failed to make the payments, the financial creditor invoked the guarantee and called upon Reliance Capital to make the payments. However, despite several notices, the corporate guarantor failed to make the payments, forcing IDBI Trusteeship to move insolvency plea against Reliance Broadcast Network.
The NCLT has appointed Rohit Ramesh Mehra as the interim resolution professional in the case.
About Reliance Broadcast Network
Reliance Broadcast Network Limited owns BIG FM, one of India’s largest radio network with 58 stations, reaches out to 1200+ towns and 50,000+ villages and over 45 crore Indians across the country under. It is owned by Anil Ambani
The Company’s total income for the financial year ended 31 March 2022 was Rs 145 crore as against Rs 134 crore in the previous year. The Net Loss stood at Rs 119 crore as compared to the Net loss of Rs 127 crore for the previous year.
It is one of the several Anil Ambani-promoted companies that either are undergoing insolvency resolution process or have found resolution through CIRP.
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