Reliance Infratel Limited

Total plan funding, as printed

Total Resolution Amount not exceeding INR 3,720 crores

Upfront amount, as printed

Upfront payment of INR 3,720 crores to creditors (including CIRP costs); Upfront Equity Infusion of INR 5,00,00,000 against allotment of equity shares

Deferred amount, as printed

Payment to Financial Creditors from value realised from preference shares in Reliance Realty Limited: INR 800,00,00,000 (less taxes/transaction costs), within 30 days of completion of the sale and related approvals.

Cirp cost treatment

Payment of unpaid CIRP Costs in full and in priority to all other stakeholders; if the Corporate Debtor's cash flows on the Effective Date are insufficient, the shortfall shall be deducted from the Infused Resolution Amount and paid in priority.

Performance security

INR 90.4 crore

Performance security instrument

BG

Units note

Figures printed in a mix of INR crore/lakh and absolute Rupee notation across the different tables in the order.

Figures printed in a mix of INR crore/lakh and absolute Rupee notation across the different tables in the order.

Body of order · 7 rows

1. Seq

   1

   Beneficiary

   CIRP Costs (unpaid)

   Amount as printed

   Full amount, in priority to all other stakeholders

   Timing as printed

   On/around the Effective Date; deducted from the Infused Resolution Amount if the Corporate Debtor's cash flows are insufficient

2. Seq

   2

   Beneficiary

   Workmen / Employees

   Amount as printed

   1,81,27,767/-

3. Seq

   3

   Beneficiary

   Related Parties / potential Related Parties

   Amount as printed

   NIL

4. Seq

   4

   Beneficiary

   Statutory Creditors

   Amount as printed

   404,45,218/- (12.91%) [Refer Note 2]

5. Seq

   5

   Beneficiary

   Operational Creditors (other than Related Parties, Statutory Creditors)

   Amount as printed

   25,36,38,128/- (19.62%) [Refer Note 2]

6. Seq

   6

   Beneficiary

   Other Creditors (remaining, non-affiliate)

   Amount as printed

   43,87,534/- (100% of their claims per Note 3, after affiliates RJIL/JDFPL waived their share)

7. Seq

   7

   Beneficiary

   Financial Creditors

   Amount as printed

   4235,77,87,067/- (~10.32%) [Refer Note 4]

   Timing as printed

   Distributed pro-rata to Debt after CIRP Costs, Workmen/Employees and Operational Creditors are paid

8. Seq

   8

   Beneficiary

   Approving Financial Creditors (from RRL preference-share realisation)

   Amount as printed

   INR 800,00,00,000 (less taxes/transaction costs)

   Timing as printed

   Within 30 days of completion of the RRL asset sale and related approvals

9. Seq

   9

   Beneficiary

   Resolution Applicant - upfront equity infusion

   Amount as printed

   INR 5,00,00,000

   Timing as printed

   Upfront, against allotment of equity shares

10. Seq

    10

    Beneficiary

    Corporate Debtor - additional fund infusion

    Amount as printed

    Up to INR 450,00,00,000, in one or more tranches

    Timing as printed

    From the Effective Date, for working capital/capex/other operational improvements

Entity type

company

Applicant net worth

Group flagship Reliance Industries Limited (RIL): FY 2018-19 consolidated turnover INR 6,22,809 crore, consolidated PAT INR 39,588 crore, market capitalisation INR 8,63,996 crore.

Sources of funds

RA to infuse a Total Resolution Amount not exceeding INR 3,720 crores; additional fund infusion up to INR 450 Crore in one or more tranches from the Effective Date for working capital/capex/other operational improvements; upfront equity infusion of INR 5 crores; further INR 800 Crore from value realised on preference shares held by Reliance Bhutan Limited in Reliance Realty Limited (or RA's purchase of RRL's real estate assets for INR 800 Crore if sale proceeds are lower), distributed to Approving Financial Creditors.

Post plan management

RA to appoint suitably qualified and experienced key personnel/officers for the CD's operations under Section 30(2)(c); existing employees and workmen proposed to continue employment, subject to a manpower restructuring plan the RA may undertake post-Effective Date.

Statutory dues

Admitted Rs. 31,32,81,573/-; provided Rs. 404,45,218/- (12.91%) [Refer Note 2] (figure transcribed as printed in the order).

Operational creditors

Operational Creditors (other than Related Parties, Statutory Creditors): admitted Rs. 1,29,28,99,328/-; provided Rs. 25,36,38,128/- (19.62%). Payment structured per Note 2: 50% of verified claims up to INR 1 Crore for claims within that limit; for claims above INR 1 Crore, 50% of the first INR 1 Crore plus 10% of the amount over INR 1 Crore. In liquidation, Operational Creditors would receive NIL (Liquidation Value INR 4,339.58 Crores versus Secured Financial Creditor claim of INR 48,091.85 Crores); the Plan nonetheless provides INR 25.36 Crores to Operational Creditors.

Workmen employees

Workmen/Employees: admitted and provided Rs. 1,81,27,767/- (100%), i.e., full and final payment.

Guarantors

Resolution Plan binding on the Corporate Debtor, its employees, members, creditors, guarantors and other stakeholders involved.

Litigation carveout

Henceforth, no creditors of the erstwhile Corporate Debtor can claim anything other than the liabilities referred to in the Resolution Plan's Financial Terms (para 6 of the order).

Group entities

Resolution Applicant is part of the Reliance Industries Group; RJIL (an affiliate of the RA) waived up to INR 250,00,00,000 towards CIRP Cost it incurred for maintenance/preservation of the CD's value, and RJIL/JDFPL (affiliates of the RA) waived INR 904,01,37,349/- of their 'Other Creditors' claim. Reliance Bhutan Limited (a wholly owned subsidiary of the CD) holds preference shares in Reliance Realty Limited (RRL, another Reliance Communications Group company holding real estate assets); sale or purchase of these RRL assets is the source for an INR 800 Crore payment to Approving Financial Creditors.

Assets description

Liquidation Value of the Corporate Debtor: INR 4,339.58 Crores; Fair Market Value: INR 11,149.11 Crores. Claim of the Secured Financial Creditor: INR 48,091.85 Crores.

Going concern status

Plan envisages a business plan for maintaining the Corporate Debtor as a going concern; the Resolution Applicant to leverage the Reliance Industries Group's 'best in class project execution' track record for infrastructure upgradation; existing employees/workmen proposed to continue employment, subject to a possible manpower restructuring plan post-Effective Date.

Interim resolution professional

Manish Dhirajlal Kaneria

RP replaced the IRP

Yes

Rp replacement date

2019-05-30

Rp replacement reason

CoC in its first meeting (30.05.2019) decided to replace the IRP with Anish Niranjan Nanavaty as Resolution Professional; the Tribunal confirmed the appointment by order dated 21.06.2019.

Invitations for expressions of interest

1. Round no

   1

   Form g date

   2019-07-15

   Eoi last date

   2019-11-25

   Expressions of interest received

   15

   Plans received

   4

   Outcome

   plan approved

Applicants considered

1. Name

   Bharti Airtel Ltd.

   Stage reached

   plan_submitted

   Outcome note

   Submitted a Resolution Plan; not the plan taken forward by the CoC.

2. Name

   Reliance Digital Platform & Project Services Limited (through its division Infrastructure Projects), later renamed Reliance Projects & Property Management Services Limited

   Stage reached

   approved

   Plan value as printed

   Total Resolution Amount not exceeding INR 3,720 crores

   Vote pct

   100%

   Outcome note

   Successful Resolution Applicant; plan taken forward as preferred plan at the 16th CoC meeting (09.01.2020, reconvened 13.01.2020); revised plan submitted 13.01.2020; approved by CoC in 19th meeting on 02.03.2020; LoI dated 04.03.2020 unconditionally accepted by RA on 06.03.2020.

3. Name

   VFSI Holdings Pte. Ltd.

   Stage reached

   plan_submitted

   Outcome note

   Submitted a Resolution Plan; not the plan taken forward by the CoC.

4. Name

   UV Asset Construction Company Ltd.

   Stage reached

   plan_submitted

   Outcome note

   Submitted a Resolution Plan; not the plan taken forward by the CoC.

Bidding mechanism

negotiation

Evaluation matrix present

Yes

Clock events

1. Kind

   exclusion

   Granted date

   2019-05-09

   Reason

   Period of NCLAT stay of the Admission Order, between 30.05.2018 and 30.04.2019, excluded from the CIRP calculation.

2. Kind

   extension

   Days

   90

   Granted date

   2019-09-29

   Reason

   CIRP extended from 12.10.2019 to 10.01.2020.

3. Kind

   exclusion

   Days

   24

   Granted date

   2020-01-07

   Reason

   Exclusion of 24 days owing to time spent in litigation from the date of approval of the Applicant as RP till the date of publication of the order confirming that appointment.

Dissenting fc treatment

Since the Plan has been approved by 100% voting share of the CoC, the provision for dissenting financial creditor treatment does not arise (Regulation 38(1)(b) compliance).

Business & treatment of stakeholders

The existing pre-CIRP shareholding of the promoters/promoter group and all other existing shareholders in the Corporate Debtor shall stand cancelled without any further act or deed pursuant to the Plan; the Resolution Applicant and/or its affiliate or nominee shall subscribe to the CD's equity shares via an upfront equity infusion of INR 5 crores; the RA (with affiliates/nominees) shall thereupon hold 100% of the CD's share capital and acquire control.

Capital reduction

Yes

Post plan shareholding

1. Holder

   Resolution Applicant (Reliance Digital Platform & Project Services Limited) and/or its affiliates/nominees

   After

   100% of share capital

Effective date definition

"Closing Action Notice": upon fulfilment of conditions precedent to the monitoring committee's satisfaction and communication of that fulfilment to the Resolution Applicant, the RA shall issue notice within 5 Business Days to the erstwhile CoC confirming the date on which it proposes to implement the Plan; if not issued within 5 Business Days, deemed issued provided the conditions precedent are satisfied. The Closing Action Notice identifies the "Effective Date" when Plan-implementation actions take place.

Monitoring committee

Comprising the Resolution Professional, two nominees/representatives of Approving Financial Creditors, and two nominees of the Resolution Applicant; manages the Corporate Debtor's affairs and oversees Plan implementation between the NCLT Approval Date and the Effective Date; decisions taken by majority, comprising at least one RA representative and one Approving Financial Creditor representative.

Monitoring committee members

1. Name

   Resolution Professional (Anish Niranjan Nanavaty)

   Role

   member

2. Name

   2 nominees/representatives of Approving Financial Creditors

   Role

   member

3. Name

   2 nominees of Resolution Applicant

   Role

   member

1. Seq

   1

   Relief

   (all reliefs, en bloc)

   Disposition

   declined

   Reason

   The Resolution Applicant has sought certain reliefs, concessions, waivers. We however are not inclined to grant such concessions or waivers. The Resolution Applicant needs to approach the authorities concerned for permits, if required, and same would be considered on merits by the concerned authorities in accordance with law.

2. Seq

   2

   Relief

   Waiver of statutory obligations of the Corporate Debtor

   Category

   statutory_dues

   Disposition

   deferred_to_authority

   Reason

   The approval of the Resolution Plan shall not be construed as waiver of any statutory obligations of the Corporate Debtor and shall be dealt with by the appropriate Authorities in accordance with law; any waiver sought in the Resolution Plan shall be subject to approval by the Authorities concerned.

1. Objector

   Doha Bank

   Objector class

   financial_creditor

   Ground

   Filed IA No. 1960 of 2019 challenging the admission of claims of a few other creditors; and IA No. 3055 of 2019 impugning the Resolution Professional's decision recognising the Indirect Lenders of the Corporate Debtor as Financial Creditors.

   Ia number

   1960 of 2019 and 3055 of 2019

   Disposition

   referred

   Effect on approval

   Both Applications pending consideration; the Tribunal held that their pendency would not come in the way of Plan approval given the CoC's unanimous approval. Distribution of payments to Creditors made subject to orders to be passed in these pending IAs; the amount infused by the Resolution Applicant to be kept in an interest-bearing deposit in a Nationalised Bank until their disposal.

Applications

1. Sections

   43, 45, 47, 49, 50, 66

   Status

   pending

   Proceeds treatment

   The Plan provides for recoveries from Applications under Sections 43, 45, 47, 49, 50 or 66 of the Code, which shall be solely for the benefit of the Financial Creditors (Note 2 to the overall payment table).

Conditions imposed

1. Condition

   Distribution of payments to Financial Creditors shall abide by and be subject to orders passed in IA Nos. 1960 of 2019 and 3055 of 2019, pending before this Bench; the amount to be infused by the Resolution Applicant shall be kept in an interest-bearing deposit in a Nationalised Bank until disposal of these Applications.

   Addressed to

   Resolution Applicant / Resolution Professional

Approval conditional on external order

Yes

External order ref

IA No. 1960 of 2019 and IA No. 3055 of 2019 (pending before NCLT, Mumbai Bench)

Appellate history

Certain shareholders of the Corporate Debtor challenged the Admission Order before the NCLAT in CA (AT) (Insolvency) Nos. 255-256 & 257-258 & 259-260 of 2018; the NCLAT stayed the Admission Order by order dated 30.05.2018; the Appellants later withdrew the Appeal, and the NCLAT permitted withdrawal by order dated 30.04.2019, directing this Tribunal to proceed with the matter in accordance with law.

Precedents cited

1. Case

   Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors.: (2019) SCC OnLine SC 1478

   Proposition

   A successful Resolution Applicant cannot be faced with undecided claims after the plan is accepted; all claims must be submitted to and decided by the Resolution Professional so the successful Resolution Applicant knows exactly what is payable, and it takes over on a fresh/clean slate.

2. Case

   K. Sashidhar v. Indian Overseas Bank & Others: 2019 SCC Online SC 257 (2019) 12 SCC 150

   Proposition

   NCLT's scrutiny of a CoC-approved plan is limited to Section 30(2) requirements; its role is 'no more and no less', circumscribed by Section 31.

3. Case

   Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors. (para 42)

   Proposition

   The Adjudicating Authority cannot modify a CoC-approved Resolution Plan; judicial review must remain within the four corners of Section 30(2).

Judicial observations

1. "A successful resolution Applicant cannot suddenly be faced with 'undecided' claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution Applicant who successfully take over the business of the corporate debtor." (p.15, quoting Essar Steel)
2. "We are of the considered opinion that pendency of these and other Applications would not come in the way of approval or otherwise of the Resolution Plan. More so, when the Resolution Plan has been unanimously approved by the CoC." (p.17)

Companies named in the order

1. Reliance Infratel Limited

Order date

2020-12-03