India’s National Company Law Tribunal (NCLT) has approved the acquisition of Reliance Communications’ (RCOM’s) infrastructure division Reliance Infratel Limited (RITL) by Reliance Project and Property Management Services Limited (RPPMSL) – part of Reliance Industries Limited (RIL), the parent company of Indian full-service provider Reliance Jo Infocomm (Jio) – the Economic Times reports. RITL’s assets include around 178,000 route kilometres of fibre and 43,540 towers across the country, and to complete the transaction the RIL subsidiary will be required to deposit INR37.2 billion (USD455 million) in a State Bank of India (SBI) escrow account.
The long-delayed sale is part of RCOM’s bankruptcy process, which has been held up by disagreements between the company’s creditors and with local authorities. A major sticking point for the process has been the handling of the company’s most valuable asset, its spectrum licences, which the Department of Telecommunications (DoT) holds cannot be sold as part of insolvency resolution. The divestment of RCOM’s physical infrastructure assets, meanwhile, has been a similarly convoluted endeavour, with a deal having initially been struck back in December 2017 only to be abandoned in March 2019 amidst challenges from creditors and the DoT.
Jio was given the green light to acquire RITL in December 2020 but, as noted by TeleGeography’s GlobalComms Database, the process was held up again. A forensic audit of the Infratel accounts had led the SBI to classify Infratel’s as ‘fraud accounts’ and Jio had refused to continue with the transaction until it could inspect the relevant accounts itself. The matter was referred to the courts and it was not until March 2022 that any further progress was made, when RCOM’s creditors agreed to provide Jio with the forensic audits.