Highlights of the article:
- Reliance Power Ltd board sets permission for the preferential issue of shares and securities to Reliance Infra at INR 10 / share
- The shareholding of Reliance Infra and sponsor group in Reliance Power will rise to 25% following the issue of equity shares
Reliance Power Ltd.’s board on Sunday sets an approval for a preferential issue of the following that value at INR 1,325 crore. This is to its sponsor company Reliance Infrastructure (RInfra) –
- 5 crore equity shares
- 73 crore securities
Reliance Power Ltd board sets an approval of the preferential issue of shares and securities to RInfra at INR 10 / share.
The firm, in a regulatory filing, informs that its board makes approval for a preferential issue of up to 59.5 crore equity shares. In addition, up to 73 crore securities. These together are transformable into an equal number of its equity shares. Which is at an issue price of INR 10 each by exchange of debt to listed sponsor company Reliance Infrastructure Ltd.
According to the filing, this will lower Reliance Power’s standalone debt by INR 1,325 crore. This is along with proposed debt reduction in subsidiaries. Also, Reliance Power’s combined debt will decrease by INR 3,200 crore in 2021-2022.
With this, the shareholding of Reliance Infra and sponsor company in Reliance Power will rise to 25%. This is following the issue of equity shares, mentions the company officials.
And, the shareholding will further rise to more than 38% post-conversion of securities, the representative adds.
In addition, the Reliance Power’s board also approves pursuing permitting authorizations of members for issuance of foreign currency convertible bonds. Also, securities all through qualified institutions placement.
The board approved requesting approval of the company’s members for these plans via a postal ballot.
Last week, Anil Ambani-led Reliance Infrastructure Ltd raised up funds to INR 550.56 crore. This is by preferential allocation of shares to lower debt and fund future increases.
The board of directors authorizes fundraising by preferential allotment. This is up to 8.88 crore equity shares and/or securities convertible into equal numbers. These are to the sponsor group and VFSI Holdings Pte Ltd, an associate of Varde Investment Partners LP.