Reliance Power’s board on Sunday approved a preferential issue of 59.5 crore equity shares and 73 crore warrants worth Rs 1,325 crore to its promoter firm Reliance Infrastructure.
Its board of directors at a meeting on Sunday approved a preferential issue of up to 59.5 crore equity shares and up to 73 crore warrants convertible into equivalent number of its equity shares, at an issue price of Rs 10 each by conversion of debt to listed promoter firm Reliance Infrastructure Ltd, Reliance Power said in a BSE filing.
It aggregates up to Rs 1,325 crore, Reliance Power added in the filing.
As per the filing, this will reduce Reliance Power’s standalone debt by Rs 1,325 crore and along with planned debt reduction in subsidiaries, Reliance Power’s consolidated debt will reduce by Rs 3,200 crore in 2021-22.
Reliance Infrastructure and other promoter holding in Reliance Power will increase up to 25 percent after issue of equity shares and will further increase to over 38 per cent on conversion of warrants, benefitting eight lakh shareholders of Reliance Infrastructure.
Reliance Power’s board also approved seeking enabling authorisations of members for issuance of foreign currency convertible bonds; and securities through qualified institutions placement, Reliance Power said in its filing.
The board approved seeking approval of the company’s members for these proposals through a postal ballot.
Reliance Infrastructure said in a filing, “The board of directors of Reliance Infrastructure Ltd…approved the subscription of 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 Ltd, by conversion of outstanding debt including interest aggregating up to Rs 1,325 crore.”
The proposals shall be subject to all requisite permissions, sanctions and approvals as may be necessary.
On June 6, Reliance Infrastructure’s board had approved raising up to Rs 550.56 crore through issuance of shares on a preferential basis.
The funds raised would be utilised for long-term resources for general corporate purposes, to fund future growth and also to reduce debt, the company had said in a statement.