More Stories

Informist, Friday, Dec. 20, 2024

 

--SC admits China Development Bk, 3 bks fincl claim in Reliance Infratel case 

--CONTEXT: Reliance Jio arm had acquired Reliance Infratel through IBC

 

NEW DELHI – The Supreme Court on Friday favoured China Development Bank, Exim Bank of China, Asset Care and Reconstruction Enterprises and others by allowing their financial claims in the corporate insolvency resolution process of Reliance Infratel Ltd., which is now acquired by Reliance Project & Property Management Services Ltd, a subsidiary of Reliance Jio Infocomm Ltd.

 

The apex court has set aside a 2022 National Company Law Appellate Tribunal order which had ruled for derecognition of China Development Bank and others as financial creditors of Reliance Infratel. The resolution professional of Reliance Infratel had earlier admitted claims worth INR 410.55 billion from 35 financial creditors, including INR 109.52 billion of China Development Bank and other three creditors. 

 

In 2020, the National Company Law Tribunal had approved the resolution plan submitted by Reliance Project & Property Management for Reliance Infratel, a debt-ridden subsidiary of Reliance Communications. Reliance Jio's arm had placed a bid of INR 37.2 billion rupees to acquire the tower and fibre assets of Reliance Infratel. In a separate order, the tribunal had allowed the resolution professional to admit financial claims of China Development Bank, Exim Bank of China and other two creditors. 

 

However, Doha Bank Q.P.S.C challenged the tribunal's order in the appellate tribunal. Doha Bank said that the four creditors were "indirect creditors" since they had not provided any loan to Reliance Infratel but had filed claims on the basis of Reliance Infratel hypothecating its assets in their favour to secure loans for Reliance Communications. Allowing the plea by Doha Bank, the appellate tribunal said the resolution professional considered the "Deed of Hypothecation" as a "Deed of Guarantee" and it was a misconception of the obligations. 

 

In 2022, the National Company Law Tribunal gave its approval to Reliance Project for the acquisition of Reliance Infratel. Thereafter, Reliance Jio's arm completed the 100% stake acquisition in Reliance Infratel. The funds of the resolution plan were to be distributed among the lenders once the inter-creditor dispute over the distribution of resolution funds was settled, which the top court ruled on Friday.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2024. All rights reserved.