New Delhi: Reliance Infratel Ltd Tuesday told the National Company Law Appellate Tribunal (NCLAT) on Tuesday that there was no choice but to sell its tower and fibre assets to Reliance Jio Infocomm Ltd.
Reliance Infratel counsel Kapil Sibal informed the court that in order to evade initiation of proceedings under the Insolvency Code, The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and liquidation, the company decided to sell its tower and fibre assets to Reliance Jio after it emerged as the highest bidder for the same.
“This transaction allows lenders to monetize the assets to an extent of Rs8,000 crore. Under any other circumstances, the company would not be able to recover its outstanding debt," Sibal stated, arguing that the decision to sell the assets to Reliance Jio was in no way prejudicial or oppressive.
An NCLAT bench head by president S.J. Mukhopadhaya was hearing Reliance Group unit Reliance Infratel’s appeal against a 12 March order of the Mumbai bench of the National Company Law Tribunal, which prohibited it from selling its tower and fibre assets to Reliance Jio.
The 12 March stay order was passed in a plea by offshore investors of Reliance Infratel led by HSBC Daisy Investments (Mauritius) Ltd, alleging oppression of minority shareholders and mismanagement for not taking their consent for the asset sale as per the articles of association of the company.
Out of 43,000 towers owned by RInfratel, 32,000 towers are already leased out to Reliance Jio, NCLAT was informed.
Anil Ambani’s Reliance Group owes over Rs45,000 crore to various banks.
In December 2017, as part of its debt resolution plan, RCom struck a Rs25,000 crore deal with Mukesh Ambani’s Reliance Jio for the sale of its assets mortgaged with different banks, to avoid insolvency proceedings.
On 5 April, Supreme Court had allowed RCom, in a partial relief, to proceed with the sale of spectrum, media convergence nodes (MCN) and real estate (at New Delhi, Chennai, Kolkata, Jigni and Tirupati) by vacating a March order of the Bombay high court.
The matter would be next heard on 10 May.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.