Reliance Power (RPower), led by Anil Ambani, approved a preferential sale of 59.5 crore equity shares and 73 crore warrants to its parent firm Reliance Infrastructure worth $13.25 billion (1,325 crore) on Sunday.
RPower stated in a filing with the Bombay Stock Exchange that the decision will reduce its standalone debt by Rs 1,325 crore and its total debt by $32 billion (Rs 3,200 crore) in the current financial year (BSE).
The decision by the boards of directors of the two cash-strapped Reliance Group companies is intended at decreasing Reliance Power's debt, which it has defaulted on.
According to Reliance Power's filing, the board also approved obtaining members' enabling authorizations for the issuing of foreign currency convertible bonds and securities through qualifying institutions placement.
Following the issue of equity shares, Reliance Infra and the promoter group led by Anil Ambani will have a 25% stake in Reliance Power, which will rise to over 38% after the conversion of warrants.
Ambani upped his shareholding in Reliance Infrastructure just a week ago. Ambani and VFSI Holdings Pte Limited, a Värde Investment Partners LP affiliate, have invested 550 crore in RInfra. Ambani is responsible for 400 crores of the total. The board of directors of Reliance Power approved the preferential offer of shares and warrants to Reliance Infrastructure on Sunday.