The Mumbai bench of the National Company Law Tribunal (NCLT) has resolved two distinct bankruptcy cases brought against Reliance Infrastructure (RInfra) and its subsidiary Mumbai Metro One (MMOPL), providing a significant reprieve. A debt settlement agreement negotiated between Mumbai Metro and the lenders resulted in the dismissal of the petitions brought by State Bank of India (SBI) and IDBI Bank, giving relief to RInfra. NCLT considers insolvency arguments made against Mumbai Metro One
This move is significant because it allows the Maharashtra government to quickly acquire RInfra’s share in MMOPL, the company that runs the busiest metro system in Mumbai. Since 2020, RInfra has been attempting to withdraw from the project.
RInfra
According to a regulatory update from RInfra, a company in the Anil Ambani group, the petitions were dismissed in light of the one-time debt settlement (OTS) agreement that was executed by the parties.
The Mumbai Metropolitan Regional Development Authority owns a 26% share in Mumbai Metro One, a joint venture, while RInfra owns the remaining 74%. The city’s first metro line, which runs 11.4 kilometers from Versova to Ghatkopar and serves more than 450,000 commuters per day, was opened to the public in 2014 and is operated by MMOPL.
In August 2023, SBI filed a plea under Section 7 of the Corporate Insolvency Resolution Process, requesting the start of insolvency proceedings and the recovery of Rs 416.08 crore. The IDBI Bank promptly filed a similar petition after this. The lenders were a member of the six-person group that provided funding for the Mumbai Metro project.
RInfra had previously disclosed in a regulatory filing that the consortium’s entire principle debt in Mumbai Metro One was Rs 1,711 crore.
The state government’s plans to purchase RInfra’s 74% ownership in MMOPL, estimated at ₹4,000 crore, were approved by the Maharashtra cabinet in April.
The Supreme Court overturned its own three-year-old ruling last week, which had given a RInfra subsidiary a Rs 8,000 crore payout in a dispute with Delhi Metro. The court further demanded that RInfra refund the roughly Rs 2,500 crore it had previously been given. The highest court declared that a public utility burdened with an enormous liability suffered a serious injustice as a result of the earlier ruling.
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