The Anil Ambani-led companies said on Sunday, June 13, 2021, that Reliance Power will issue shares and warrants worth Rs, 1,325 crores to group company Reliance Infrastructure, to convert the outstanding loans and interest into equity.
The decision taken is aimed at reducing the debt of Reliance Power which has defaulted on debt repayment of lenders and creditors. The Company in its statement said, “this will reduce Reliance Power standalone debt by Rs 1,325 crores and along with planned debt reduction in subsidiaries, Reliance Power consolidated debt will reduce by Rs 3,200 crores in Financial Year 2022.”
Reliance Power had previously stated that the company’s consolidated debt was around Rs. 2,500 crores after reduction of debt by Rs. 3,108 crores in the year 2020-21.
Reliance Power will make a preferential issue of up to 59.5 crores equity shares and up to 73 crores warrants convertible into equivalent number of equity shares of the company at an issue price of Rs 10 each, in lieu of the loan from Reliance Infrastructure. The issue price is at a 21.5 percent discount to Friday’s close of Reliance Power shares at Rs 12.74 each at Bombay Stock Exchange.
The Reliance Power Board, on Sunday, June 13, also approved enabling provision of issuing foreign currency convertible bonds and securities through qualified institutions placement.
A week back, Reliance industries had announced its plan to raise Rs. 550 crores by issue of shares and convertible warrants to Värde Investment Partners LP, Minneapolis-based fund manager and an Anil Ambani-led Reliance Group entity.