NCLT Mumbai Approves Resolution Plan For Reliance Communications Infrastructure Ltd., Valued At Rs 455.9 Crores As Against Total Admitted Claim Of Rs 47,251 Crores.

The Resolution Plan is valued at Rs. 455.9 Crores, while the total admitted claims against the Corporate Debtor amounts to Rs. 47,251 Crores.

Background Facts

Reliance Communications Infrastructure Ltd. (“Corporate Debtor/RCIL”) is a subsidiary of Reliance Communications Ltd. which was previously being run by Anil Ambani.

On 25.09.2019, the NCLT admitted the Corporate Debtor into Corporate Insolvency Resolution Process (“CIRP”).

Reliance Projects & Property Management Services Limited (“Successful Resolution Applicant/SRA”) is a wholly owned subsidiary of Mukesh Ambani promoted Reliance Industries Ltd.

There was a total of four applicants, namely, Sify Technologies Limited, Reliance Projects & Property Management Services Limited, Asia Connectivity Pte Limited and UV Asset Reconstruction Company Ltd. However, UV Asset Reconstruction Company Ltd withdrew from the race and the other two did not respond later. Thus, the plan of Reliance Projects & Property Management Services Limited was approved by the Committee of Creditors (“CoC”) with a majority voting share of 67.97%%. Accordingly, the Resolution Professional filed an application under Section 30(6) of IBC before the NCLT, seeking approval of the Resolution Plan.

Outlay Of The Resolution Plan

The average fair value of the Corporate Debtor is Rs. 722.5 Crores and average Liquidation value is Rs. 428 Crores.

The claims submitted by the Corporate Debtor's creditors were admitted by the Resolution Professional to the extent of Rs. 47,251 Crores. The Resolution Plan of SRA is valued at Rs. 455.92 Crores, excluding the CIRP Cost.

The Resolution Plan clarifies that out of the total admitted financial debt of Rs. 41,397.36 Crores, the direct lending to the Corporate Debtor is only Rs. 182.20 crores (0.44% of total debt). The balance amounts have been admitted on the basis of corporate guarantees and other similar/third party obligations of the Corporate Debtor, which claims are also admitted claims in the corporate insolvency resolution process of Reliance Communications Limited, Reliance Telecom Limited, Reliance Infratel Limited.

The resolution plan proposes to pay the Secured Financial Creditors an amount of Rs. 455 Crores against an admitted claim of Rs. 41,365 Crores, the Unsecured Financial Creditors an amount of Rs. 11.9 Lakhs against an admitted claim of Rs. 5,613 Crores. The Related Party of the Corporate Debtor have been paid NIL as against their admitted claim of Rs. 238 Crores. The Government dues have been allocated Rs. 19.4 Lakhs as against an admitted claim of Rs. 17.3 Crores.

The Employees and Workmen have been paid Rs. 8.63 Lakhs as against their admitted claim of Rs. 7.5 Crores. Further, Rs. 3.2 Lakhs have been allocated towards claims 'on behalf of Employees and Workmen' as against an admitted claim of Rs. 2.8 Crores. The other Operational Creditors have been paid Rs. 7 Lakhs against their admitted claim of Rs. 6.3 Crores.

NCLT Verdict

The Bench has approved the Resolution Plan of Reliance Projects & Property Management Services Limited for the Corporate Debtor.

Case Title: State Bank of India v Reliance Communications Infrastructure Limited

Case No.: IA No. 2429 of 2021 in CP (IB) No. 3025 of 2019

Counsel for Applicant: Mr. Anoop Rawat, Mr. Rishabh Jaisani, Mr. Deepak Deshmukh, Mr. Vivek Dwivedi, Mr. Hrishikesh Nadkarni Advocates.

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