The board of Reliance Power Limited has approved the plan to raise funds up to Rs 1,325 crore through preferential issue of equity shares, the Anil Ambani-backed company announced on June 13.
The Board of Directors, who met earlier in the day, gave their assent to the proposed plan of preferential allotment of up to 59.5 crore equity shares to group company Reliance Infrastructure Limited. The shares would be allotted at an issue price of Rs 10 each.
"The Board of Directors of Reliance Power Limited at its meeting held today has approved preferential issue of up to 59.5 crore equity shares and up to 73 crore warrants convertible into 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," an official statement noted.
"This will reduce Reliance Power's standalone debt by Rs 1,325 crore and along with planned debt reduction in subsidiaries, Reliance Power consolidated debt will reduce by ~Rs 3,200 Crore in FY22," it added.
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 percent on conversion of warrants, benefitting around 8 lakh shareholders of Reliance Infrastructure, the statement added.
The Board also approved seeking enabling authorisations of members for issuance of foreign currency convertible bonds; and (securities through qualified institutions placement, Reliance Power said.
The development comes a week after the board of Reliance Infra approved the plan to raise Rs 550 crore through preferential issue of shares to promoters and Värde Investment Partners, LP, at a price of Rs 62 each.