Reliance Power recently made a strategic move by allotting a massive amount of 46.20 crore equity shares, which are valued at a sky-high Rs 1,524.60 crore.
In a huge setback for Mukesh Ambani’s brother Anil Ambani, Reliance Power Ltd saw its shares hit a 5% low on trading Friday, breaking away from its 15 consecutive successful days. The severe dip in the share prices came in the wake of the company’s announcement that it intends to privately place Foreign Currency Convertible Bonds (FCCBs) amounting to Rs 4,200 crore with the affiliate of Värde Investment Partners. The fund-raising decision was made at their anticipatory meeting held on the 3rd of October.
“Reliance Power board approves issue of up to U.S.$ 500 million (~Rs 4,200 crore) ultra-low cost interest of 5% per annum, unsecured, 10-year long tenure FCCBs, on private placement basis to affiliates of Värde Investment Partners, LP,” the company said in its press release on Thursday.
Strategic move by Reliance Power
Reliance Power recently made a strategic move by allotting a massive amount of 46.20 crore equity shares, which are valued at a sky-high Rs 1,524.60 crore. This preferential allotment was distributed to its parent company, Reliance Infrastructure Ltd, marking a significant development. Accompanying them in this deal were two non-promoter entities, Authum Investment and Infrastructure Ltd and Sanatan Financial Advisory Services Private Ltd. This latter entity was represented by team Sanjay Kothari and Meenakshi Sanjay Kothari. This bold maneuver is a part of Reliance Power’s bigger plan to bolster its foothold in the renewable energy sector.
Amid the huge fall in the share prices of the Reliance Power, there are speculations that the winning streak of Anil Ambani might end soon and the bad old days for the Ambani brother will be back where the price of Reliance Power shares were in the price range of Rs 30 per share.
Details on Foreign Currency Convertible Bonds (FCCBs)
The FCCBs will be issued to affiliates of Varde Investment Partners, LP, which is a leading Global Alternative Investment Firm, Reliance Power said. The FCCBs will be convertible into equity shares at Rs 51 per share.
The Board further approved ESOS for all employees to provide grants of up to 22 crore equity shares of value of over Rs 1,180 crore (Rs 10 each) representing 5 per cent of fully-diluted capital of the company.
The ESOS will unlock the employee earning potential, in alignment to the company’s performance and growth. The ESOS shall be subject to the approval of shareholders of the company and other regulatory approvals.
Reliance Power Ltd, a part of the Reliance Group, is a leading power generation company in India with a total installed capacity of 5,340 MW, including the 4,000 MW Ultra Mega Power Project in Sasan, Madhya Pradesh.
(With inputs from agencies)