RIL unit may need to pay upto Rs 4,975 crore for Reliance Infratel

Mumbai: Reliance Industries' subsidiary Reliance Digital Platform & Project Services may have to spend up to Rs 4,975 crore to take over tower firm Reliance Infratel, as per the order of the bankruptcy court that cleared Infratel’s resolution plan on Thursday.

According to the order, the resolution applicant — in this case, Reliance Digital — has proposed to pay Rs 3,720 crore for the corporate debtor (Reliance Infratel). The money will be distributed among the lenders to the tower arm of Reliance Communications, the bankrupt and now-defunct telecom company of the Anil Ambani-led Reliance Group.

Besides this, the lenders are likely to get another Rs800 crore from the sale of a land parcel held by Reliance Realty, which is also part of the Anil Ambani-led Reliance Group. But if Reliance Realty could not get Rs 800 crore for the land, the resolution applicant will purchase it for Rs 800 crore and distribute the amount to the lenders on a pro-rata basis, according to the ruling.

The resolution plan also includes a fund infusion of up to Rs 450 crore, which can be used as working capital to take care of urgent improvements and repairs at the tower company. Besides these, the resolution applicant or its affiliate or nominee would subscribe to Rs 5 crore worth equity shares of Reliance Infratel.

"The amount sought to be infused by the resolution applicant (RA) shall be kept in an interest-bearing deposit in any nationalised bank till disposal of the said applications," the order said.

Mukesh Ambani-led Reliance Digital had outbid asset reconstruction company UVARCL, Bharti Airtel and VFSI Holdings for Reliance Infratel.

The order said Infratel would be maintained as " a going concern".

"The RA will leverage the proven track record of the Reliance Industries Group of ‘best in class project execution’ to ensure upgradation of the infrastructure. The corporate debtor will also benefit from the scale and the efficiency that the RA already enjoys, as one of the leading companies in India," said the NCLT order.

The next step will be regulatory approvals which will include one from the Reserve Bank of India, since payments to global lenders such as Industrial and Commercial Bank of China (ICBC) are involved, according to people in the know.

The lenders to Reliance Infratel though will have to take a significant haircut on their outstanding loans. Some 13 of the major lenders of Infratel had claimed Rs 12,687.65 crore, of which Rs 9,665.07 crore of claims were admitted. They include State Bank of India (Rs3,628.68 crore), Syndicate Bank (Rs 1,225.18 crore) and Bank of India (Rs 1,064.82 crore), besides ICBC (Rs 1,832.91 crore). There are many other financial creditors who had filed their claims.

The resolution plans of RCom and subsidiary Reliance Telecom are still pending with the NCLT. According to the plans approved by lenders, RCom and its units will go to asset reconstruction company UVARCL. The total consideration of Rs 20,000-23,000 crore, including from the Reliance Infratel resolution, would be paid over a period of seven years.