Varde Partners to pick up 15% in Reliance Power for Rs 933 crore

Reliance Power on Thursday said that it would raise Rs 933 crore through a private placement of shares to VFSI Holdings, an affiliate of investment firm Varde Partners. This would result in VFSI picking up a 15 per cent stake in the company.

The announcement comes within days of Reliance Power stating that it would raise upto Rs 1,200 crore from Varde Partners, a global alternative investment firm specialising in credit and credit-related assets.

The private placement of shares announced on Thursday following a board meet will happen at Rs 15.55 apiece, the company said in a filing to the stock exchanges. Reliance Power's stock price closed trade at Rs 21.30 a share on Thursday, down 1.62 per cent over the previous day's close.

In July, the shareholders of the company had rejected its asset monetisation plan at its annual general meeting. This was despite 72 per cent shareholders voting in favour of the special resolution to monetise its assets, while 28 per cent had voted against the resolution. A special resolution requires 75 per cent of shareholders to vote in its favour, according to proxy advisory firms.

A report by Institutional Investor Advisory Services (IiAS) had said that the company has defaulted on loans to the tune of Rs 3,561 crore as on March 31, 2022. This was the principal amount, with the interest amount working out to Rs 1,783 crore. Lenders to Reliance Power include Axis Bank, Yes Bank and State Bank of India among others.

Piramal Capital had earlier this year moved the National Company Law Tribunal (NCLT) against Reliance Power under Section 7 of the Insolvency and Bankruptcy Code, 2016 for a loan default in excess of Rs 500 crore. The NCLT had asked the two sides to settle the dispute by this month.