Reliance Infra rises 8% on paring debt, resolving power business dispute

Reliance Infrastructure has cleared its dues to LIC, Edelweiss Asset Reconstruction Company, ICICI Bank, Union Bank, and other lenders, apart from resolving disputes related to the transfer of its Mum

Reliance Infrastructure shares soared as much as 8 per cent and registered an intraday high of Rs 254.4 per share, after the company informed that it has pared down its debt. On top of that, the company also announced that it has resolved the disputes related to the transfer of its Mumbai power business to Adani Energy Solutions.

At around 10:10 AM, shares of Reliance Infrastructure were up 5.96 per cent at Rs 249.7 per share. In comparison, the BSE Sensex was trading 2.61 points higher at 83,082.27, around the same time. The stock extended its rally for the third consecutive session.

 

Reliance Infrastructure, through an exchange filing earlier today, said it has cleared its funded outstanding dues to Life Insurance Corporation of India (LIC), Edelweiss Asset Reconstruction Company Limited, ICICI Bank, Union Bank, and other lenders.

"The company’s external debt liability is down to Rs 475 crore. Consequently, the net worth of the company will stand at Rs 9,041 crore," the company's filing stated.

In other exchange filings, the company stated that it has completed a one time settlement with LIC of the entire obligations of Rs 600 crore, with respect to Non Convertible Debentures (NCD) issued by it, along with obligations of Rs 235 crore, arising from NCDs issued to Edelweiss ARC. 

The company added that Vidarbha Industries Power Limited (VIPL) has ceased to be its subsidiary and the entire obligations of the company as a Guarantor on behalf of VIPL stands fully settled. This has resulted in the "release and discharge of Corporate Guarantee, Undertakings and all obligations and claims thereunder in relation to the outstanding debt of VIPL amounting to Rs 3,872.04 crore." 

The filing also said that Invent Assets Securitisation and Reconstruction, a lender to the company, has novated (replaced with a new contract) certain charged securities to recover its dues and now its fund-based outstanding stands at zero.

That apart, Reliance Infrastructure also filed an exchange filing informing that it has settled disputes with Adani Electricity Mumbai Ltd (AEML) and Adani Energy Solutions Ltd (AESL), earlier known as Adani Transmission Ltd. The disputes were related to the transfer of its Mumbai power business to Adani Energy Solutions.  

A previous filing dated December 21, 2017, informed the signing of a definitive binding agreement between Adani Transmission and Reliance Infrastructure for a 100 per cent stake sale of its Mumbai power business, including the integrated business of generation, transmission and distribution of power for Mumbai.

On Monday, Reliance Infrastructure also informed that its board will consider raising long-term funds in a meeting on September 19, 2024.

Reliance Infrastructure is a constituent of the Anil Ambani-led Reliance Group. The company is engaged in the business of providing Engineering and Construction (E&C) services for power, roads, metro rail, and other infrastructure sectors.

Reliance Infrastructure is also engaged in the implementation, operation, and maintenance of several projects in the defence sector and infrastructural areas through its special purpose vehicles. It has executed the Mumbai Metro line one project. Further, the company is also a leading utility company having a presence across the value chain of energy businesses.

In the past one year, shares of Reliance Infrastructure have gained 28.5 per cent, compared to the BSE Sensex's rise of 23 per cent dring the same period.