On Sunday, the Reliance Power Ltd board approved a preferential issue of 59.5 crore equity shares and 73 crore warrants convertible into an equivalent number of equity shares of the company worth ₹1,325 crores to its promoter firm Reliance Infrastructure.
The preferential allotment will help Reliance Power in reducing the standalone debt by Rs 1,325 crore and along with designed debt reduction in subsidiaries, Reliance Power’s consolidated debt will come down to Rs 3,200 crore in FY22, Reliance Power said in a statement.
The board “has approved the preferential issue 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 Rs 10 each by conversion of debt, aggregating up to Rs 1,325 crore to Reliance Infrastructure Limited, a listed promoter company”, said the statement released by the company.
With this, there will be an increase to 25% in the shareholding of Reliance Infra and promoter group in Reliance Power after the issue of equity shares, the company said.
And, over 38% post-conversion of warrants, the shareholding will further increase, added the statement.
Moreover, the Reliance Power’s board also engaged in seeking authorisations of members for issuance of foreign currency convertible bonds, and securities via qualified institutions placement.
Through a postal ballot, the board sought the approval of the company’s members for these proposals.
This development has been seen after the board of Reliance Infra got the approval of the plan to raise Rs 550 crore through preferential issue of shares to promoters and Värde Investment Partners, LP, for Rs 62 each.