Reliance Power Offers Rs1,200 Crore To Settle Debt of Vidarbha Industries Power Project
Reliance Power has made a Rs1,200 crore one-time settlement (OTS) offer to the lenders of its subsidiary, Vidarbha Industries Power Ltd (VIPL), to settle the debt.
Reliance Power has offered to pay Rs1,200 crore in upfront cash to the lenders of VIPL which include Axis Bank, SBI, Bank of Baroda, PNB, Canara Bank, and Bank of Maharashtra.
The outstanding loan of the company as on 31 March 2022, is around Rs2,200 crore.
Reliance Power's OTS offer is backed by Varde Partners of Singapore which is an investor in another group company, Reliance Infrastructure Ltd.
VIPL operates a coal-based power project with a capacity of 600MW in Nagpur.
Earlier, Ahmedabad-based CFM Asset Reconstruction Pvt Ltd had made an all-cash offer of Rs1,120 crore to the lenders of VIPL.
However, CFM Asset Reconstruction Company is now under the scanner of the Reserve Bank of India (RBI) and the income-tax (I-T) department for alleged malpractices and business misconduct.
After the offer by CFM ARC offer, National Asset Reconstruction Company Ltd (NARCL) had also made an offer of Rs1,150 crore to the VIPL lenders, but out of this only 15% is payable in upfront cash, while the balance will be paid in interest-free instalments, over the next five years. The net present value of NARCL's offer is said to be only Rs850 crore.
Compared to this, the Rs1,200 crore all-cash offer by Reliance Power is significantly higher and attractive for the lenders of VIPL.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Kamal Garg
2 weeks ago
Does it indicate a good turnaround in the fortunes of Reliance Power and AA group also.
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