Companies

‘Reliance Infrastructure looking to pare debts to zero by 2020’

Venkatesh Ganesh Mumbai | Updated on June 17, 2019 Published on June 17, 2019

Punit Garg, ED and CEO, Reliance Infrastructure

Company expects most claim adjudications to go its way

Anil Dhirubhai Ambani-led group company Reliance Infrastructure is looking to pare its debts to zero by 2020, as it expects a majority of claim adjudications to go its way.

The standalone debt of Reliance Infra has reduced by almost 70 per cent to ₹5,960 crore at the end of 2019 fiscal. This was ₹19,143 crore in 2018 fiscal. Further, its interest costs reduced 22 per cent to ₹1,210 crore in 2019, from ₹1,552 crore in 2018.

“We are awaiting final adjudication orders on claims of over ₹30,000 crore,” Punit Garg, ED and CEO, Reliance Infrastructure, told BusinessLine.

Also read: We’re servicing our debt, trimming arrears: Anil Ambani

He added that the company expects standalone interest costs to reduce to around ₹600 crore by 2020 financial year. By doing this the company won’t have any constraints in working capital, Garg pointed out.

The company has decided is to exit the roads-related business. Its Special Purpose Vehicle (SPV), DA Toll Road Private Ltd, which operates the Delhi-Agra toll road was sold off to Singapore-based Cube Highways & Infrastructure. “We are in advanced negotiations to sell other such projects,” said Garg.

The company has reported a consolidated loss of ₹3,247.48 crore in the March-ended quarter, after it wrote off its entire investment in subsidiary Reliance Naval and Engineering, which was an NPA when Reliance Infrastructure acquired the company in 2016. However, Reliance Infra is seeing a possibility of writing back this investment post the revised RBI circular. In the March-ended period last year, it had a profit of ₹149.33 crore.

Also read: PwC resigns as statutory auditor of RCap, Reliance Home Finance

Reliance Infra’s results have come more than a week after developments that played out regarding one of its auditors PwC, which eventually resulted in PwC’s resignation. The delay in Reliance Infrastructure’s results, coupled with rumours that the Group will not be able to service any of its debts, forced Chairman Anil Ambani to say that it has serviced debt payments of over ₹35,000 crore in the last 14 months.

Published on June 17, 2019
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