Reliance Duo Vows Debt Payoff by Fiscal Year End

11 Jan 2024 , 12:06 PM

With a commitment to pay off the debts by the end of this fiscal year, Anil Ambani’s Reliance Power and Reliance Infrastructure, respectively, have signed separate standstill agreements with lenders DBS Bank and JC Flowers Asset Reconstruction Company.

The creditors will refrain from pursuing legal action against both corporations during this time.

Reliance Power and DBS Bank signed the standstill agreement on January 5, according per an exchange filing. On January 7, Reliance Infrastructure revealed the agreement with JC Flowers ARC.

DBS Bank is owed Rs 110 crore by Reliance Power, and JC Flowers ARC is owed around Rs 2,000 crore by Reliance Infrastructure.

The original lender, Yes Bank, has handed JC Flowers ARC ownership of its impaired credit book, which includes debts to Reliance Infrastructure and Reliance Power, totaling Rs 48,000 crore.

Reliance Power reported to the exchanges that their total debt was Rs 765 crore as of December 31, 2023. Reliance Infrastructure disclosed separately that, for the same period, its total debt was Rs 4,233 crore.

According to a statement from the business, Reliance Power cleared debts with JC Flowers ARC and Canara Bank in April 2023.

The business received Rs 1,200 crore in June 2023 from Varde Partners affiliate VFSI Holdings. By means of preferential allotment, the business granted warrants to VFSI at a rate of Rs 15.55 per warrant.

Of the Rs 1,200 crore that the Varde business raised, Rs 925 crore went toward paying down Rosa Power’s debt, with the rest amount going toward repaying Reliance Power’s liabilities.

Reliance Commercial Finance, which Authum Investment & Infrastructure purchased, made a Rs 1,043 crore investment in each of the two Reliance businesses in August. It made investments of Rs 152 crore in Reliance Power and Rs 891 crore in Reliance Infrastructure.

Reliance Power and Reliance Infra guaranteed loans raised by Reliance Commercial and Reliance Home Finance before 2020. Following its acquisition of Reliance Commercial, Authum recalled the loan and triggered these guarantees. Reliance Commercial has received shares from Reliance Power and Reliance Infra as payment for turning debt into equity.

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