Anil Ambani group companies Reliance Infrastructure and its subsidiary Reliance Power have undertaken major debt restructuring exercises, according to filings with the stock exchanges.
While Reliance Power has become debt free on a standalone basis after exiting its subsidiary Vidarbha Industries Power (VIPL) by settling its dues towards the corporate guarantee to lenders of VIPL, Reliance Infra said it has reduced its standalone external debt by almost 87.6% to Rs 475 crore, down from Rs 3,831 crore as of June, by clearing dues to Life Insurance Corporation of India, Edelweiss Asset Reconstruction Company, ICICI Bank, Union Bank and other lenders.
Shares of Reliance Power and Reliance Infra hit the upper circuits on Wednesday following the announcements on debt restructuring. Reliance Infra jumped 20% to close at Rs 282.75 on the BSE while Reliance Power soared 5% to settle at Rs 32.98.
Reliance Power has pledged 100% shares of Vidarbha Power in favour of CFM Asset Reconstruction. In exchange, CFM has released the corporate guarantee given by Reliance Power against the outstanding debt of Vidarbha Power, the company said in an exchange filing.
Axis Trustee Services, as a trustee for CFM, and Axis Bank, the lender to Vidarbha Power, have invoked the pledge, and taken over the management control of Vidarbha Power, it said. Vidarbha Power now ceases to be a subsidiary of Reliance Power.
Reliance Power has zero debt now on a standalone basis. As of June 2024, it had a consolidated net debt of Rs 17,812 crore.
In a separate announcement, Reliance Infrastructure said Invent Assets Securitisation and Reconstruction, a lender to the company, has assigned certain pledged securities to recover its dues. As a result, Invent ARC’s entire outstanding dues get reduced to zero.
Following the development, the standalone debt of Reliance Infrastructure has come down to Rs 475 crore. It had a consolidated net debt of Rs 9,741 crore as of March 2024.
On August 22, the Securities and Exchange Board of India barred Anil Ambani from the securities market for five years. Sebi imposed the ban on Ambani and other former key executives of Reliance Home Finance for allegedly diverting funds from the company.
Reliance Power had issued a clarification regarding the regulator’s order. “Reliance Power was not a notice or party to the proceedings before Sebi in which the order is passed. No directions are given in the order against Reliance Power. Anil Ambani had resigned from the board of directors of Reliance Power pursuant to the interim order dated February 11, 2022, passed by Sebi in the same proceedings,” the company said.
From: financialexpress
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