The National Company Law Tribunal’s (NCLT) Mumbai has upheld a petition filed by Doha Bank that would help in full recovery of ₹3,515 crore for the financial creditors of Reliance Infratel Ltd (RITL).
Doha Bank, one of the financial creditors of RITL, had filed an application against the corporate guarantee holders of Reliance Communications Ltd (RCom) and Reliance Telecom Limited (RTL), seeking priority payment for the financial creditors of RITL. The bank was seeking priority payment from the proceeds of RITL’s resolution plan, sources close to the development said.
Reliance Jio Infocomm, a subsidiary of Reliance Industries Ltd, had acquired these assets through NCLT driven debt resolution process.
NCLT Mumbai had approved the RITL’s resolution plan on December 3, in favour of Reliance Projects & Property Management Services Ltd, another RIL subsidiary.
While approving the resolution plan, NCLT had directed that the distribution of proceeds to the financial creditors was subject to the disposal of Doha Bank application.
Reliance Infratel had issued certain guarantees to RCom and RTL lenders. When RCom and RTL defaulted, the lenders of these two companies invoked the guarantees and converted them into debt. Doha Bank’s contention was that the direct lenders of RTL had a first right over the proceeds from the company’s resolution plan, and not the corporate guarantee holders of RCom and RTL.
NCLT in its order has upheld the Doha Bank plea, thus paving the way for 100 per cent recovery for the financial creditors of RITL.
The resolution plan allows distribution of ₹4,400 crore to RITL lenders. The State Bank of India will get ₹728 crore Mahima Merchantile ₹514 crore, SC Lowy ₹511 crore, VTB Capital PLC ₹511 crore, Doha Bank ₹409 crore, Emirates NBD ₹322 crore, ICBC ₹278 crore, and Standard Chartered Bank ₹242 crore.
RITL will also get ₹455 crore towards the equity and working capital needs from RJio.
The implementation of Resolution Plan is expected to be completed by March 31, 2021.