Piramal Capital and Housing Finance has withdrawn the insolvency proceedings filed against Reliance Power, following an out-of-court settlement between the two companies.

“We wish to inform that Piramal Capital and Housing Finance Limited has withdrawn the application made against Reliance Power Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016,” Reliance Power informed the exchanges late on Tuesday.

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In July, during an NCLT hearing of Piramal Capital’s case against Reliance Power, both the companies had claimed that they are in discussions to settle the matter out-of-court, by mutual consent.

The settlement process had been going on since July and the last court hearing was scheduled sometime in early September. However, the final settlement and withdrawal of the insolvency proceedings was only completed last week, a source told businessline.

The proceedings

Piramal Capital had initiated insolvency proceedings against Reliance Power and its subsidiary Reliance Natural Resources in March 2022 over dues which were then valued at around ₹526 crore.

Reliance Natural Resources, which merged with Reliance Power in 2010, had taken the loan from erstwhile Dewan Housing Finance Corporation — which was later acquired by the Piramal Group in September 2021 and merged with Piramal Capital.

The principal amount is estimated to be around ₹300 crore, and the total dues had likely risen to about ₹600 crore by now, sources said, adding that the out-of-court settlement is likely to have been done at around the principal amount of ₹300 crore.

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