NCLT approves Sapphire Media’s Rs 261-cr bid for Reliance Broadcast Network
The Mumbai bench of the National Company Law Tribunal (NCLT) has approved the Rs 261 crore resolution plan submitted by successful resolution applicant Sapphire Media for Reliance Broadcast Network Limited, an Anil Ambani-promoted company. The committed of creditors (CoC) had on 11 November 2023, approved resolution plan submitted by Sapphire Media Limited with a voting share of 88.97%.
Insolvency proceedings against Reliance Broadcast Network Limited, the owner of Big FM radio station, was started by IDBI Trusteeship Services Limited on behalf of L&T Investment Management Limited in February 2023. The insolvency petition was filed against Reliance Broadcast Network (corporate debtor) after it failed to clear financial debt of Rs 175 crore.
As per the resolution plan of Saphire Media, secured creditors would receive an amount of Rs 255 crore or 44% of the admitted amount of Rs 578 crore. No provisions have been made for unsecured creditors against their admitted claims of Rs 347.5 crore. Rs 6 crore has been set aside for operational creditors against their admitted claims of Rs 21.77 crore.
Of the Rs 261 crore, the successful resolution applicant will contribute Rs 100 crore through equity, and the rest of the Rs 151 crore will be sourced through unsecured loans. For capex, the new owners of Reliance Broadcast Network Limited would be using Rs 15 crore in the bank balance of the corporate debtor.
The resolution applicant has warranted that the funds required for the implementation of the resolution plan have been arranged and are backed by a separate comfort letters of Rs 130 crore issued by director and shareholders of Resolution Applicant Sahil Mangla, Madan Lal Mangla and Usha Mangla.
The CIRP cost will be paid out of internal cash accruals and bank balances of Reliance Broadband Network. In case the internal cash accruals and bank balances are insufficient, the resolution applicant agrees to fund the outstanding CIRP costs.
Also See: Another Anil Ambani firm Reliance Broadcast Network faces insolvency proceedings
