NCLT upholds Doha Bank’s petition seeking priority payment for financial creditors of Reliance Infratel

NCLT upholds Doha Bank's petition seeking priority payment for financial creditors of Reliance Infratel

New Delhi: 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 a payment of about ₹4,400 crores realised from the sale of assets to a Reliance Industries Ltd ( RIL) subsidiary through an NCLT-driven debt resolution process.

According to the source, State Bank of India will receive ₹728 crores, Mahima Mercantile ₹514 crores, SC Lowy ₹511 crores, VTB Capital PLC ₹511 crores, Doha Bank 409 crore, Emirates NBD ₹322 crores, ICBC ₹278 crores, and Standard Chartered Bank will get ₹242 crores.

“Reliance Infratel will also get ₹455 crore towards the equity and Working Capital needs from RIL subsidiary. Rest of the amount will be distributed among operational creditors, employees etc,” the source said.

NCLT, Mumbai had approved the Reliance Infratel resolution plan on December 3, 2020, favouring a RIL subsidiary– Reliance Projects and Property Management Services Ltd.

The tribunal had also noted that the distribution of proceeds to the financial creditors was subject to the disposal of Doha Bank’sBank’s application.

Reliance Infratel had issued certain guarantees favouring Reliance Communications (RCom) and Reliance Telecom Ltd (RTL) lenders. Still, these two companies’ lenders invoked guarantees when they defaulted and converted them into debt.

Doha Bank’sBank contended that the direct lenders of Reliance Infratel had the first right over the proceeds from the company company’s resolution plan and not the corporate guarantee holders of RCom and RTL.

Written by Ritik Gupta

His name is Ritik Gupta; currently pursuing law. He has always kept pride as his everything. He deems writing as not like any other hobby but a reflection of one’s intellectuality. He likes to research on the parasitic problems and then lay them down in such a means that can be of assistance to the society. He just not studies law but treats it a controversial weapon to defeat the wrong.

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