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Authum turns debt from RInfra and RPower into equity; invokes guarantee

9 Aug 2023 , 12:51 PM

The NBFC Authum Investments & Infrastructure, promoted by Sanjay Dangi, has invoked guarantees issued by Anil Ambani’s Reliance Infrastructure (RInfra) and Reliance Power (RPower) to the former Reliance Commercial Finance Ltd (RCFL) and Reliance Home Finance Ltd (RHFL), converting Rs 1,043 crore of debt into equity.

The boards of RInfra and RPower approved the preferential allotment on Saturday, and a notice for shareholder approval was published on Sunday.

Authum concluded the takeover of Anil Ambani’s RCFL and RHFL in October and March, respectively, through a lender-led procedure.

Both NBFCs made short-term intra-company loans that were guaranteed by RInfra and RPower. As these group firms were unable to repay these loans, the liability must now be carried by the guarantees that have been invoked.

RInfra plans to issue 44.3 million shares at Rs 201 each. RPower will also issue 75.9 million shares at Rs 20 per share to repay Rs 152 crore in debt. Following the allotment, Authum will own 1.99% of RPower.

Both purchases will be completed through RCFL, which was acquired by Authum in October of last year and was later used to complete the purchase of RHFL in March. Last date for shareholders voting is September 5.

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