NIE: SBI seeks more time from NCLT to file reply in Reliance Infratel case

1 June 2019: Public sector lender SBI on Friday sought more time from the NCLT to file reply on Doha Bank’s plea seeking stay on a decision of the committee of creditors (CoC) of Reliance Infratel (RITL).

Doha Bank has argued that the creditors’ panel has considered the claims of lenders of parent firm Reliance Communications on the basis of corporate guarantee of RITL which would reduce its voting share in the CoC.

The bank claimed to be direct lenders and said as a syndicate of four banks, it had lent Rs 1,400 crore to RITL. Doha Bank is against considering lenders having corporate guarantee of RITL as financial creditors as this will marginalise their voting rights to 15 per cent from around 55 per cent currently.

The lenders of Reliance Infratel have invoked bank guarantees of Rs 8,000 crore issued by the company in favour of Reliance Communications. The tribunal asked State Bank of India (SBI) to file reply within seven days and Doha Bank to file a rejoinder in three days.

The advocate for Doha Bank Prateek Saksaria had said the petition should be heard before e-voting in the ongoing CoC, whose main agenda are the appointment of resolution professional, determination of voting rights among others.

According to the RComm’s website, Reliance Infratel’s lenders have claimed Rs 12,687.65 crore, of which Rs 9,665.07 crore has been admitted so far. Claims against RComm stood at Rs 49,193.46 crore and the resolution professional, RBSA Advisors LLP, has admitted Rs 47,038.79 crore. Saksaria said, as a syndicate of four banks, including Doha Bank, are direct lenders and had lent Rs 1,400 crore to RITL, the tower unit of RComm.

After listening to the argument, the National Company Law Tribunal (NCLT) bench comprising of V P Singh and Ravikumar Duraisamy said, the IRP process will continue till the order is passed and so will the CoC meeting.

However, they said, it is to be clarified that if the CoC pass any resolution in the meeting, it will depend on the outcome of this plea. The tribunal has kept the hearing on the matter on June 21. The corporate insolvency resolution process of debt ridden telecom resumed after the appellate tribunal vacated the stay on the CIRP of RCom.

In September 2017, Ericsson had filed a petition in the NCLT’s Mumbai bench seeking liquidation of the telecom operator to recover Rs 1,150 crore that RComm allegedly owes it.

This was accepted by the NCLT over RCom’s failure to pay dues to the tune of Rs 1,500 crore, however, it was later stayed by the National Company Law Appellate Tribunal (NCLAT) as both parties reached a settlement, with RComm agreeing to pay Rs 550 crore to Ericsson by September 30, 2018.

Meanwhile, RComm moved the Supreme Court, seeking an extension of the deadline to pay the amount to Ericsson because of a delay in completion of spectrum sale and other assets, to which the apex court granted it time till December 15, 2018.

After RComm had failed to pay the agreed amount, Ericsson moved the apex court wherein the court ordered Anil Ambani, Reliance Telecom Chairman Satish Seth, and Reliance Infratel Chairperson Chhaya Virani to pay Rs 453 crore within four weeks (March 18, 2019). The Swedish company has been opposed to RComm’s insolvency proceedings as it will then have to return the money it had received.

Under insolvency proceedings, dues of financial creditors are settled first and operational creditors get paid only after that. The NCLAT had observed that in case insolvency proceedings against RComm and two other companies were restarted, Ericsson might have to refund the money.

The New Indian Express reported



Categories: General News, India Bankruptcy

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