In a significant development, Reliance Power announced today that its two subsidiaries have successfully settled a debt amounting to ₹1,023 crore. The debt resolution was achieved through a strategic agreement with Authum Investment’s arm, Reliance Commercial Finance.
The Subsidiaries Involved
- Kalai Power Pvt Ltd: One of the key players, Kalai Power Pvt Ltd, played a pivotal role in this settlement. Notably, in December 2023, Kalai Power had already sold the development rights of its proposed 1,200 Megawatt hydro-electric project in Arunachal Pradesh to THDC India Ltd for a sum of ₹128 crore.
- Reliance Cleangen Ltd: The second subsidiary, Reliance Cleangen Ltd, also participated in the debt settlement process. Both subsidiaries signed a debt settlement and discharge agreement with Reliance Commercial Finance Ltd (RCFL), which is a wholly-owned subsidiary of Authum Investment & Infrastructure Limited.
The Context
The debt settlement comes on the heels of another significant transaction by Reliance Power. Just a few days ago, the company announced the sale of its 45 MW wind power project in Maharashtra to JSW Renewable Energy for a consideration of ₹132 crore.
Authum Investment’s Role
Authum Investment, as part of a banks-led resolution process, had previously acquired Reliance Commercial Finance and Reliance Home Finance from Reliance Capital Ltd in 2022. The recent settlement further strengthens the financial position of Reliance Power.
Reliance Power’s Debt-Free Aspirations
Reliance Power has been actively working towards becoming a debt-free company on a standalone basis. As of the end of fiscal year 2023, the company had an outstanding debt of approximately ₹700 crore. By the close of this fiscal year (March 31, 2024), Reliance Power aims to achieve its debt-free objective1.
The company has also been proactively signing debt settlement agreements with various banks, including DBS Bank, ICICI Bank, and Axis Bank.
In summary, Reliance Power’s successful debt settlement underscores its commitment to financial stability and strategic growth. Investors and stakeholders are closely monitoring the company’s progress as it navigates its path toward a debt-free future.
Disclaimer: This article is based on publicly available information and should not be considered financial advice. Always consult with a qualified financial advisor before making any investment decisions.
