R-Defence gets RBI nod to exit CDR

Reliance Defence and Engineering has received RBI (Reserve Bank of India) approval to exit the corporate debt restructuring (CDR) package, sources said. CDR is the reorganisation of a company’s outstanding obligations, often achieved by reducing the burden of the debts on the company by decreasing the rates paid and increasing the time the company has to pay the obligation back.

Anil Ambani-led Reliance Infrastructure has acquired nearly 35 per cent in Pipavav Defence and Offshore Engineering Co, which has been renamed as Reliance Defence and Engineering.

Reliance Defence’s debt of Rs 6,000 crore will be refinanced with maturity of 20 years while interest cost would be reduced to 11 per cent, sources added. Reliance Group spokesperson declined to comment.

In December 2015, Reliance Infrastructure completed the open offer made to Pipavav Defence, taking its overall holding in the company to nearly 35 per cent. The open offer was made through Reliance Defence Systems Pvt.

The exit from CDR is expected to lead to greater financial flexibility and business opportunities, enabling the company to contribute to the security of the country and pursue the Make in India and Skill India programmes in an even more significant manner, Reliance Infrastructure had said in November.
 

Reliance Defence rose nearly 6% to Rs 67.05 in afternoon trade on BSE.