Sapphire Media Ltd. received the National Company Law Tribunal’s (NCLT) approval to acquire the bankrupt Reliance Broadcast Network Ltd., which owns the Big 92.7 FM radio network.

The Mumbai bench of the NCLT, comprising Judicial Member Reeta Kohli and Technical Member Madhu Sinha, approved Sapphire Media’s resolution plan for Reliance Broadcast Network on 6 May, the tribunal order showed.

The Kaithal, Haryana-based company’s resolution plan was approved by 88.97% voting shares of Reliance Broadcast Network’s committee of creditors on 11 November 2023.

Thereafter, the company’s resolution professional Rohit Ramesh Mehra sought the NCLT’s approval for the resolution plan.

The Verdict

The tribunal remarked the resolution plan is not in contravention of any of the provisions of Section 29A of the Insolvency and Bankruptcy Code and is in accordance with the law.

The resolution plan is feasible and viable, and it balances the interest of all the stakeholders and thus, it deserves to be approved, the NCLT said.

“The resolution plan submitted by Sapphire Media Limited, is hereby approved,” It noted.

The Payout

Sapphire Media’s resolution plan proposes to pay a total of 261 crore rupees ($31 million) to Reliance Broadcast Network’s creditors against the admitted liabilities of 947.59 crore rupees, the NCLT order showed.

The plan proposes to pay 255 crore rupees to the company’s secured financial creditors against their admitted liabilities of 578.35 crore rupees. Unsecured financial creditors, however, will get nothing against their admitted claim of 347.47 crore rupees.

Operational creditors will get six crore rupees against their admitted liabilities of 21.77 crore rupees.

Based on the registered valuers reports, Reliance Broadcast Network’s average fair value was estimated at 237.8 crore rupees, while average liquidation value was pegged at 189.4 crore rupees.

The Background

The Mumbai-based company was admitted into corporate insolvency resolution process on 24 February 2023 following a petition by its financial creditor IDBI Trusteeship Services Ltd.

The development came after IDBI Trusteeship on behalf of debenture holder L&T Investment Management Ltd. filed an insolvency petition before the NCLT against Reliance Broadcast Network, claiming a default of around 174 crore rupees.

Reliance Broadcast Network-owned Big FM is one of India’s largest radio network with 58 stations and reaches out to over 1,200 towns and more than 50,000 villages, according to its website.

Note: $1 = 83.4794 Indian rupees

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India Watch List For Wednesday - June 26