Reliance Defence to make equity rights issue of up to Rs 1,200 cr

Proceeds to be used to augment long-term resources to exit from CDR and strengthen its financial position

Reliance Defence and Engineering Limited (RDEL) plans to augment its long-term resources by making a rights issue of equity shares aggregating up to Rs 1,200 crore. RDEL's board gave its approval at its meeting held today. The issue will be subject to applicable approvals.

The proceeds of the issue would enable RDEL to exit from the Corporate Debt Restructuring (CDR) and strengthen its financial position. Further, the resources would equip RDEL to undertake strategic business from the Ministry of Defence.

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RDEL,formerly Pipavav Defence and Offshore Engineering Company Limited, in a release said the price, entitlement ratio and the record date for the rights issue will be decided in due course, in consultation with the advisors and bankers to the issue. The company with an integrated shipbuilding facility with 662m x 65m Dry dock has obtained the licence and contract to build warships.