On July 14, Reliance Power Limited received approval from a majority of its shareholders through the postal ballot to issue shares and warrants worth ₹1,325 crore on a preferential basis to Reliance Infrastructure, one of its promoter groups.
The company stated, “The shareholders of Reliance Power Limited (Reliance Power), through postal ballot, have approved with overwhelming majority, preferential issue of equity shares and warrants.”
In a postal ballot issued in the month of June, the company had said that its target was to be free of debt. To achieve the objective as well as enhance its net worth and financial position, it was proposed that RInfra’s existing debt facilities could be capitalized by either converting or appropriating the same into equity shares and/or warrants convertible into equity shares.
Additionally, Reliance Power shall allot 59.50 crore equity shares along with 73 crore warrants convertible into an equivalent number of the company’s shares at ₹10 each by conversion of debt, comprising of ₹1,325 in total to a listed promotor company Reliance Infrastructure.
Promoter groups including RInfra’s holding will rise to 24.98 percent and shall further jump to 38.24 percent on the conversion of warrants where 8 lakh shareholders of Reliance Infrastructure would benefit from.
In addition, Reliance Power’s shareholders have dominantly approved of the raise of funds by issuing foreign currency convertible bonds up to 50 percent of the Company’s then net worth, and securities through qualified institutions placement up to 25 percent of the Company’s then net worth.