Anil Ambani says Reliance Infra will become debt free

Our Bureau Mumbai | Updated on September 14, 2021

Will repay debts using DMRC arbitral award of ₹7,100 crore

Reliance Infrastructure’s new growth engines will be centred around the power distribution business as the new Electricity Act will open up a plethora of opportunities; new contracts in EPC; and defence manufacturing, Anil Ambani, Chairman, Reliance Infrastructure, said at the company’s annual general meeting (AGM) on Tuesday.

He also said that Reliance Infrastructure will receive ₹7,100 crore from the Delhi Metro Rail Corporation after a recent Supreme Court judgement. The Supreme Court upheld the arbitral award in favour of Delhi Airport Metro Express Private Limited (DAMEPL) — a Reliance Infra arm that used to operate the Delhi Airport Metro Line. The proceeds will be utilised to repay the debts of Reliance Infra and the company will become debt-free, Ambani said.

Pending disputes

He added that there are regulatory assets worth ₹50,000 crore under approval or dispute before various forums for its power distribution businesses. Further, arbitration claims worth ₹15,000 crore are pending before various forums.

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Last AGM, RInfra Chairman had announced that promoters will be increasing their shareholding in the company. The preferential issue of over ₹550 crore comprising of 8.88 crore warrants of ₹62 each, convertible into equity, has increased promoter holding to 22.06 per cent . In Reliance Power, Reliance Infra and other promoters have increased their stake by converting ₹1,325 crore ICD. The current holding is 24.98 per cent and will to go up to 38 per cent on the conversion of warrants.

Reliance Power

Speaking at Reliance Power’s AGM, Ambani said the company has ensured the availability of its power plants to generate power and honour commitments made under various power purchase agreements despite Covid-19.

India’s power sector continues to face challenges of low capacity utilisation of thermal plants, above targeted aggregate technical and commercial losses, lower tariffs compared to its actual cost of supply, and creation of huge regulatory assets, he said.

Regulatory logjam is evident from the long pendency of a number of petitions and appeals which do not reach finality even after 6 to 7 years of legal proceedings, he added.

The demand for electricity, which contracted due to the lockdown, has nearly bounced back to normal levels, Ambani said.

Reliance Power reduced its debt by nearly ₹3,100 crore in FY21. Further, the company expects to reduce debt by nearly ₹3,200 in FY22 which will improve its debt to equity ratio to 1.80 : 1

Published on September 14, 2021

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