Mumbai: Anil Ambani-led Reliance Power settled the debts owed to three banks - ICICI Bank, Axis Bank, and DBS Bank - last week while its parent Reliance Infrastructure is working towards settling dues of Rs 2,100 crore to JC Flowers Asset Reconstruction Company, said people with knowledge of the matter.
"Reliance Power aims to be a debt-free company by the end of this fiscal year. The only debt on its books will be the working capital loan from IDBI Bank," said a senior executive from a commercial bank. The three lenders jointly had about Rs 400 crore and have recovered close to 30-35% of their principal loans, another lender said.
Reliance Infrastructure and JC Flowers ARC had entered into a standstill agreement, according to notice issued to the exchanges on January 7. Initially, the standstill was until March 20, 2024, according to a separate stock exchange disclosure. "This was recently extended to March 31, 2024," said a spokesperson of Reliance Infrastructure.
As per the standstill agreement, JC Flowers ARC will not take legal action against Reliance Infrastructure until March 31, giving the company time to arrange funds.ICICI, Axis and DBS Bank did not respond to ET's request for comments. Reliance Power did not comment on details of settlement of the loan.
Reliance Power raised Rs 240 crore equity from VFSI Holdings on March 13, a stock exchange disclosure showed. The proceeds were probably used to settle the dues of the banks, one of the bankers cited above said. VFSI Holdings is a subsidiary of Varde Partners, a global asset asset manager.
Yes Bank, the original lender, has transferred its Rs 48,000-crore distressed loan book to JC Flowers ARC, including loans given to Reliance Infrastructure and Reliance Power.
Reliance Power disclosed to the exchanges that as of December 31, 2023, its total financial indebtedness stood at Rs 765 crore. Separately, Reliance Infrastructure stated its total financial indebtedness was Rs 4,233 crore for the same period. In April 2023, Reliance Power settled loans with two lenders - JC Flowers ARC and Canara Bank - according to exchange disclosures.
Reliance Power had allotted 200 million equity shares to VFSI Holdings in September 2022 at Rs 15.55 per share; of this, 25% was subscribed at Rs 80 crore then, while the remaining were issued as warrants. VFSI exercised the right to convert warrants into shares resulting in an infusion of Rs240 crore.In August this year, Reliance Commercial Finance, which Authum Investment & Infrastructure acquired, invested Rs 1,043 crore in both the Reliance companies. It invested Rs 891 crore in Reliance Infrastructure and Rs 152 crore in Reliance Power.
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