NCLT approves Doha Bank recovery plea against Reliance Infratel

NCLT approves Doha Bank recovery plea against Reliance Infratel

Doha Bank had contended that the direct lenders of Reliance Infratel should have the first right over the money recovered through the resolution plan, which NCLT upheld

The National Company Law Tribunal (NCLT) has approved a Doha Bank petition requesting priority payment for the financial creditors of the defunct Reliance Infratel which would mean recovery for the lenders to the tune of approximately Rs 3,515 crore.

The settlement is to be made from a payment of about Rs 4,400 crore that has been recovered from the sale of assets to a Reliance Industries subsidiary through an NCLT-driven debt resolution process.

State Bank of India should get Rs 728 crore, Mahima Mercantile Rs 514 crore, SC Lowy Rs 511 crore, VTB Capital PLC Rs 511 crore, Doha Bank 409 crore, Emirates NBD Rs 322 crore, ICBC Rs 278 crore and Standard Chartered Bank Rs 242 crore, according to estimates coming out.

With the NCLT approving Doha Bank's plea, a 100 per cent recovery process for the financial creditors of Reliance Infratel and the implementation of the Resolution Plan is expected to start soon and complete by the end of March 2021.

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

Reliance Infratel is also likely to get Rs 455 crore towards the equity and working capital needs from the RIL subsidiary, while the rest of the Rs 430 crore may be distributed among operational creditors, employees, etc.

NCLT Mumbai had approved Reliance Infratel's resolution plan on 3 December 2020.