Will not face insolvency proceedings, says Anil Ambani's Reliance Infra

Anil Ambani-led Reliance Infrastructure (RInfra) will not undergo insolvency proceedings as it is looking to pay its lenders in the next few weeks, said a company executive. RInfra is likely to complete the sale of its Delhi-Agra toll road by January-end and its proceeds will be used for debt repayment, the executive added.

“RInfra has received in-principle approval for harmonious substitution in the Delhi-Agra (DA) toll road project on January 7 from the National Highways Authority of India (NHAI). This approval paves the way for closing the sale,” the company said in a statement on Thursday.

In March 2019, RInfra had agreed to sell the Delhi-Agra road project to Cube Highways and Infrastructure for an enterprise value of Rs 3,600 crore. Of this, Rs 1,900 crore will move as special purpose vehicle (SPV) debt to Cube Highways. RInfra is expected to receive Rs 1,700 crore as consideration for its equity component in the project. “100 per cent of the proceeds will be used by RInfra to pay the lenders and reduce the debt of the company,” the statement said.

The executive mentioned earlier said with the payment of Rs 1,700 crore to lenders, RInfra would not need to go through an insolvency process.

Source: Company announcement

In a disclosure to the exchanges, RInfra pegged its current default amount at Rs 1,048.70 crore. The disclosure said the total amount outstanding as on date in terms of loans and revolving facilities was Rs 4,597.06. The company’s financial indebtedness, including short-term and long-term debt, was Rs 6,073.66 crore.

In July, the company entered into an inter-creditor agreement (ICA) with its lenders, which allowed for a standstill arrangement for six months. The tenure ended earlier this month. “The Rs 1,048.70 crore default amount is for the period between July and December,” the executive said.

The RInfra statement added, ” This (the payment from the deal proceeds) is in line with the commitment made by RInfra to its 16 lenders on July 6, 2019, when the lenders signed an ICA for the resolution of the debt and granted moratorium to the company on the interest and principal payments.”

RInfra has set a target to be debt-free at the standalone level in 2020. In its earlier statements, the company said it was looking to monetise its Mumbai office property through long-term lease as part its debt reduction plan.