Reliance Infrastructure will increase its stake in Reliance Power by converting debt into equity. Reliance Infrastructure Limited will acquire preferential issue of up to 59.5 crore equity shares and up to 73 crore warrants convertible into equivalent number of equity shares of Reliance Power Limited by conversion of outstanding debt, including interest, aggregating up to ₹1,325 crore.
Rise in shareholding
Shareholding of Reliance Infra and Anil Ambani-backed promoter group in Reliance Power will increase to 25 per cent after the issue of equity shares and further increase to over 38 per cent post-conversion of warrants.
The move comes a week after Ambani increased his stake in Reliance Infrastructure. Ambani and VFSI Holdings Pte Limited, an affiliate of Värde Investment Partners LP, is pumping in ₹550 crore into RInfra. Of this, ₹400 crore is from Ambani. On Sunday, Reliance Power’s board approved the preferential issue of shares and warrants to Reliance Infrastructure.
The preferential issue will be of up to 59.5 crore equity shares and up to 73 crore warrants convertible into an equivalent number of equity shares of the company at an issue price of ₹10 each. This is at 20 per cent discount to Friday’s closing price of ₹12.50 per share.
This will reduce Reliance Power’s standalone debt by ₹1,325 crore, and along with planned debt reduction in subsidiaries, Reliance Power’s consolidated debt will reduce by ₹3,200 crore in FY22, according to a company statement.
The board also approved the issuance of foreign currency convertible bonds and securities through qualified institutions placement.