Reliance Jio to pick up tower and fibre assets of RTIL, NLCT approves

Reliance Jio has paved the way to pick up the tower and fibre assets of the bankrupt company as the dedicated insolvency court has given its nod to Reliance Infratel’s (RTIL) resolution plan, Economic Times reported.

According to the plan approved by lenders, RCom and its subsidiary RTIL will go to UVARCL whereas the tower unit, Reliance Infratel, will go to Jio for a total consideration of Rs 20,000-23,000 crore to be paid over a period of seven years.

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Under the plan, lenders may recover about Rs 4000 crore through the resolution plan of Reliance Infratel, which is a unit of bankrupt Reliance Communications, and holds some 43,000 towers and 1,72,000 km of fibre, a person familiar with the matter said.

At the time of filing for bankruptcy, RCom had a debt of Rs 46,000 crore, with 53 financial creditors — including local and foreign banks, non-banking financial companies, and funds — laying claims.

“However, the NCLT Resolution plan distribution is subject to the disposal of Doha Bank Intervention Application,” the person added.

Besides banks, operational creditors such as tower companies, equipment vendors, and the telecom department have claimed nearly Rs 30,000 crore in dues, of which over Rs 21,000 crore has been verified.

RCom was forced to shut its wireless operations in late 2017, hurt by mounting debt and widening losses amid intense competition in the telecom sector after Jio’s entry in September 2016.

It tried to sell its wireless assets, such as spectrum and towers, to Jio but failed due to a slew of legal cases. This forced the telco, and its units, to opt for insolvency proceedings, which was admitted under the IBC in May 2019.