Reliance Power settles ₹3,872 Crore guarantor obligations

18 Sep 2024 , 12:26 PM

Reliance Power Limited has fulfilled its financial commitments as a guarantor for Vidarbha Industries Power Limited (VIPL), totalling ₹3,872.04 Crore. This settlement, announced on September 17, 2024, represents a big step forward in the company’s overall financial restructuring effort.

The settlement includes:

Settlement Agreement: Reliance Power, Rosa Power Supply Company, VIPL, and CFM Asset Reconstruction Private Limited have signed an agreement to settle the outstanding debt.

Release Deed: VIPL has executed a release deed with Axis Trustee Services, which discharges Reliance Power’s liabilities connected to external commercial borrowings.

Withdrawal of Legal Proceedings: Reliance Power has dropped all legal actions launched and against it, including those under the Insolvency and Bankruptcy Code.

Share Pledge: The lenders have secured a pledge of 92.60% of VIPL’s shares.

The proposed sale of Vidarbha Industries Power may further erode Anil Ambani’s financial empire. Ambani, a former millionaire, has fought numerous creditors and is embroiled in a high-profile succession war with his elder brother, Mukesh Ambani, Asia’s richest man.

The move came last year, when it was revealed that Gautam Adani was mulling a bid for coal-fired power plants, including the 600-megawatt producing facilities in central India managed by Vidarbha Industries Power, in a bankruptcy court auction.

At around 12.23 PM, Reliance Power was trading 5% higher at ₹32.97, against the previous close of Rs 31.40 on NSE.

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