Reliance Power offers Rs 1,200 cr to settle debt of Butibori power project

CFM ARC is now under the scanner of RBI and the Income Tax Department for alleged malpractices and business misconduct

Press Trust of India New Delhi
Reliance Power

Listen to This Article

Reliance Power has made a Rs 1,200 crore one-time settlement (OTS) proposal to the lenders of its subsidiary Vidarbha Industries Power Ltd (VIPL) to settle its debt, sources aware of the matter said.

As per the proposal, the company has offered to pay around Rs 1,200 crore in upfront cash to the lenders which include Axis Bank, SBI, Bank of Baroda, PNB, Canara Bank, and Bank of Maharashtra.

The outstanding loan of the company as on March 31, 2022, is around Rs 2,200 crore.

According to sources, Reliance Power's OTS offer is supported by Varde Partners of Singapore, which is already an investor in another group company, Reliance Infrastructure Ltd.

VIPL operates a coal-based project with a capacity of 600 MW (2x300 MW) at the Butibori Industrial Area in Nagpur, Maharashtra.

Prior to this, Ahmedabad-based CFM Asset Reconstruction Pvt Ltd had made an all-cash offer of Rs 1,120 crore to the lenders of VIPL.

Also Read

This Chris Wood owned stock hit a 52-week low. What's worrying the Street?

SBI personal banking loan book up Rs-5 trn mark, helped by digital push

How have the home loan EMIs changed since RBI's repo rate hike in May 2022?

Mukesh Ambani completes 20 years at helm of Reliance Industries

Apple supplier Foxconn to start construction of its Karnataka plant in May

Will stop competing in over-served markets, instead play big bets: Ford

JSW Steel, JFE to set up CRGO electrical steel manufacturing JV in India

PhonePe raises another $100 mn from General Atlantic as part of $1 bn plan

Gland Pharma down 33% in two days, Shreyas Shipping hits 20% upper limit

Persistent Systems opens new Poland location to expand footprint in Europe

CFM ARC is now under the scanner of RBI and the Income Tax Department for alleged malpractices and business misconduct.

The asset reconstruction company, which is a special type of financial institution that buys debtors of a bank at a mutually agreed value and attempts to recover debts or associated securities by itself, does not have the wherewithal to conclude a large transaction of over Rs 1,000 crore on all cash basis.

Post the CFM ARC offer, National Asset Reconstruction Company Limited (NARCL) had also made an offer of Rs 1,150 crore to the VIPL lenders, but out of this only 15 per cent is payable in upfront cash, while the balance will be paid in interest-free installments, over the next 5 years. The net present value of NARCL's offer is only Rs 850 crore.

Compared to this, the Rs 1,200 crore all-cash offer by Reliance Power is significantly higher and attractive for the lenders of VIPL.

Sources said the lenders of VIPL are likely to meet soon to consider the proposal.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: May 22 2023 | 5:30 PM IST

Explore News