The National Company Law Tribunal on Monday approved the acquisition of Reliance Infratel Ltd (RITL) by Jio. Jio deposited Rs 3,500 crore in an SBI escrow account to complete the acquisition of RCOM’s tower and fibre assets.
The acquisition was completed after a delay of two years, after creditors for RITL stalled the process by engaging in a legal battle over the distribution of resolution funds. SBI and a few other banks, including Doha Bank, Standard Chartered Bank, and Emirates Bank, are engaged in the dispute. Doha Bank had challenged the Resolution Professional’s classification of claims from the indirect creditors of RITL as financial creditors.
Consequently, Jio moved a fresh application in the NCLT earlier this month saying that the Rs 3,500 crore resolution amount should be kept in escrow. It could subsequently be distributed amongst the lenders once the inter-creditors’ dispute over distribution is settled.
An escrow is a contractual arrangement in which a third-party receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties.
Jio now owns the tower and fibre assets of RCOM