Reliance Power (RPL) has received its board’s approval to raise upto Rs 933 crore by way of equity infusion from a group company of global investment firm Varde Partners.
This comes days after the Anil Ambani group company entered into an agreement with Varde Partners to raise up to Rs 1,200 crore in debt, which it was planning to use for settling debt.
In a stock exchange update on Thursday, the board approved issuance of upto 600 million shares or warrants convertible into equity shares through preferential allotment to VFSI Holdings, a foreign investor. This would be issued at Rs 15.55 a share, totalling Rs 933 crore.
RPL intends to issue Foreign Currency Convertible Bonds (FCCBs), it said, adding the firm has also convened an EGM to get shareholders’ approval for the same.
Also Read: Reliance Power to raise Rs 1,200 crore in debt from Varde Partners
RPL has an operating portfolio of 5,945 MW of power projects across coal, gas, hydro and renewable energy.
Earlier on September 5, RPL said it had convened a board meeting on September 8 to seek approval for raising long-term resources from domestic or global markets. However, at that time, RPL did not specify the amount it intends to raise.
On September 5 itself, the company said it entered into an agreement with Varde Partners to raise up to Rs 1,200 crore in debt.
The drawdown of the debt will be subject to finalisation and execution of binding documents and all requisite approvals including regulatory approvals. RPL will raise jointly with a subsidiary, it had said in a separate stock exchange notice.
If successful, this would be RPL’s second fund-raising from Varde Partners. Earlier Reliance Infrastructure had raised about `550 crore from its own promoter group companies and Varde Partners in June last year.
Earlier in June this year, Varde Partners had made a debt investment of about Rs 440 crore in real estate firm Omaxe, and prior to which it had invested about Rs 1,622 crore in KSK Mahanadi. The US-based investment firm is also a bidder for the two debt-ridden Srei group companies, Srei Infrastructure Finance and Srei Equipment Finance, which are undergoing bankruptcy processes.
Earlier in March, Piramal Capital and Housing Finance (PCHFL) initiated bankruptcy proceedings against RPL and its subsidiary Reliance Natural Resources (RNRL), following a default of Rs 526-crore loan. RNRL, which was merged with Reliance Power in 2010, had obtained the loan from Dewan Housing Finance Corporation (DHFL).
The Piramal Group, controlled by billionaire Ajay Piramal, had acquired DHFL for a total consideration of `34,250 crore in 2021 and then merged it with PCHFL.
A number of firms of Anil Ambani group, including Reliance Infratel (the tower arm of Reliance Communications), Reliance Telecom, Reliance Naval and Reliance Capital are currently under insolvency processes.