Reliance Power board approves fundraising up to Rs 1,325 crore through preferential issue

Reliance Power Limited’s board of directors has authorised a plan to raise up to Rs 1,325 crore through a preferential offering of equity shares, the Anil Ambani-backed business announced on June 13.

The Board of Directors approved the proposed plan of preferential allocation of up to 59.5 crore equity shares to group firm Reliance Infrastructure Limited earlier in the day. The shares would be issued at a price of Rs 10 per share.

“The Board of Directors of Reliance Power Limited at its meeting held today has approved preferential issue of up to 59.5 crore equity shares and up to 73 crore warrants convertible into equivalent number of equity shares of the company at an issue price of Rs 10 each by conversion of debt, aggregating up to Rs 1,325 crore to Reliance Infrastructure Limited, a listed promoter company,” an official statement noted.

“This will reduce Reliance Power’s standalone debt by Rs 1,325 crore and along with planned debt reduction in subsidiaries, Reliance Power consolidated debt will reduce by ~Rs 3,200 Crore in FY22,” it added.

Reliance Infrastructure and other promoters’ holdings in Reliance Power will rise to up to 25% following the issue of equity shares and to more than 38% upon warrant conversion, benefiting approximately 8 lakh Reliance Infrastructure shareholders, the statement stated.

The Board also approved obtaining members’ enabling authorizations for the issuing of foreign currency convertible bonds and (security placement through qualified institutions), according to Reliance Power.

The news comes just a week after Reliance Infra’s board of directors authorised a plan to fund Rs 550 crore through a preferential sale of shares to promoters and Värde Investment Partners, LP at a price of Rs 62 each.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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