NCLT nod to Doha Bank petition on Rel Infratel
The National Company Law Tribunal (NCLT) has upheld the petition of Doha Bank seeking priority payment for the financial creditors of Reliance Infratel which will lead to around ~3,515 crore recovery for the lenders, according to a source aware of the development.
The National Company Law Tribunal (NCLT) has upheld the petition of Doha Bank seeking priority payment for the financial creditors of Reliance Infratel, which will lead to around ~3,515 crore recovery for the lenders, according to a source aware of the development.
The payment has to be made from the proceeds of ~4,400 crore, realised from the sale of assets to a Reliance Industries subsidiary through the Nclt-driven debt resolution process.
According to the source, SBI will receive ~728 crore, Mahima Mercantile ~514 crore, SC Lowy ~511 crore, VTB Capital ~511 crore, Doha Bank ~409 crore, Emirates NBD ~322 crore, ICBC ~278 crore, and Standard Chartered will get ~242 crore.
“Reliance Infratel will also get ~455 crore towards the equity and Working Capital needs from the RIL subsidiary. Rest of the amount will be distributed among operational creditors, employees, etc,” the source said.
The NCLT’S Mumbai Bench had approved of the
Reliance Infratel resolution plan on December 3, 2020, in favour of the RIL subsidiary — Reliance Projects and Property Management Services.
The tribunal had also noted that the distribution of proceeds to the financial creditors was subject to the disposal of Doha Bank’s application.
Reliance Infratel had issued certain guarantees in favour of Reliance Communications (Rcom) and Reliance Telecom (RTL) lenders, but the creditors had invoked guarantees when they defaulted and converted them into debt.
Doha Bank’s contention was that the direct lenders of Reliance Infratel had the first right over the proceeds from the company’s resolution plan, and not the corporate guarantee holders of Rcom and RTL.
The NCLT, in its order on Tuesday, upheld Doha Bank's plea, thus paving the way for 100 per cent recovery for the financial creditors of Reliance Infratel, and the implementation of the Resolution Plan is expected to be completed by March 31, 2021, the source added.