Two years after the deal was approved by the National Company Law Tribunal (NCLT), banks, led by the State Bank of India (SBI), have agreed to issue a no objection certificate (NOC) to Mukesh Ambani-owned Reliance Industries (RIL), whose subsidiary is Reliance Projects & Property Management Services, the winning bidder of the RITL's takeover, the ET report stated.
After the NOC, the RIL-promoted firm will transfer the agreed amount to an escrow account. The NOC, a no dues certificate, is necessary before the implementation of a resolution plan.
Also Read: Reliance Infra Q1 net loss narrows to Rs 66.11 cr; income rises 37%
"Both parties have agreed to move forward, which means there is progress in completing this resolution which has been hanging fire for close to two years now. Banks have already started issuing NOCs which will be collated and given to the resolution professional following which RIL will transfer the amount to the escrow account," a person aware of the transaction told the business daily.
RITL owes a total of Rs 13,483 crore in direct exposure to lenders out of the Rs 41,055 crore dues admitted by the NCLT. Nearly 30 lenders have direct or indirect exposure to RITL and its parent company Reliance Communications (RCom), which is controlled by Anil Ambani.
The NCLT-approved resolution plan, in December 2020, envisages a total recovery of Rs 3,720 crore from the firm, including an upfront payment of Rs 3,720 crore from the RIL. The plan also includes a future payment of Rs 800 crore on realisation from preference shares held in Reliance Realty (RRL) to financial creditors and a payment of Rs 250 crore for the resolution costs.
The total recovery is at a haircut of 65 per cent for lenders.
"It is expected that banks will give their NOCs by the end of the month and the money should flow into the escrow account latest by early next month. RIL has assured lenders that it will honour its commitment to release the amount as soon as the NOCs are in," a second person aware of the development told ET.
It should be noted that the banks will not receive the payment immediately as the National Company Law Appellate Tribunal (NCLAT) has stayed the distribution of the proceeds till further orders. This was after Qatar's Doha Bank, which also has direct fund-based exposure to the company, contested the NCLT's resolution plan with the NCLAT.
The NCLAT will hear the case next on August 26.
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