NCLT backs Doha Bank’s call to recover Rs.3,515 crore from Reliance Infratel lenders
The National Company Law Tribunal (NCLT) has upheld Doha Bank’s petition requesting priority payment to the financial creditors of Reliance Infratel, which will result in a recovery of around Rs.3,515 crore for lenders, according to a source familiar with the development.
Payment is to be made from a payment of approximately Rs 4,400 crore made when selling assets to a subsidiary of Reliance Industries Ltd (RIL) through the debt resolution process driven by NCLT.
According to the source, State Bank of India will receive Rs 728 crore, Mahima Mercantile Rs 514 crore, SC Lowy Rs 511 crore, VTB Capital PLC Rs 511 crore, Doha Bank 409 crore, Emirates NBD Rs 322 crore, ICBC Rs 278 crore and Standard Chartered Bank will get Rs 242 crore.
“Reliance Infratel will also get Rs 455 crore for the equity and working capital needs of the RIL subsidiary. The rest of the amount will be split between operational creditors, employees, etc.,” the source said.
NCLT, Mumbai had approved Reliance Infratel’s resolution plan on December 3, 2020 in favor of a subsidiary of RIL – Reliance Projects and Property Management Services Ltd.
The tribunal also noted that the distribution of the proceeds to financial creditors was subject to the settlement of Doha Bank’s claim.
Reliance Infratel had issued certain guarantees in favor of the lenders Reliance Communications (RCom) and Reliance Telecom Ltd (RTL), but the lenders of these two companies invoked guarantees in the event of default and converted them into debt.
Doha Bank’s contention was that the direct lenders of Reliance Infratel had a primary interest in the proceeds of the company’s resolution plan, and not the corporate guarantee holders of RCom and RTL.
In its Tuesday order, NCLT upheld Doha Bank’s plea, paving the way for 100% recovery for Reliance Infratel’s financial creditors, and implementation of the resolution plan is expected to be completed by the 31st. March 2021, the source said.
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Posted on: Thursday March 04, 2021 07:57 IST