Reliance Power has reached a debt restructuring agreement with US-Exim for its Samalkot Project debt of Rs 2,430 crore, the Anil Ambani-led company said on Thursday.
The US-Exim has agreed to converting amortizing repayment schedule into bullet repayments and will extend final loan maturity to June 2022. It has also lowered the interest rate to 2.65% per annum for the troubled project.
Reacting to the debt recast news, shares of Reliance Power rose 5.5% to Rs 4.20 on Bombay Stock Exchange on Thursday at 16:12 IST.
Reliance Power CEO K Raja Gopal had told ET in June that the company has already signed the term sheet for Samalkot project debt restructuring.
In 2018-19, Reliance Power undertook an impairment on its gas-based Samalkot unit which has been rendered defunct due to lack of gas to run it. At the end of fiscal FY19, US Exim had in principle agreed to restructure its term loan but it was subject to completion of certain conditions by May 31, 2019, which were not fulfilled. Therefore, the loan is now classified as current liabilities. This had worsened the mismatch between the current assets and current liabilities of the company.
The company has sold one 750 mw unit from the Samalkot project for a Bangladesh project and is looking for buyers for two other such units to cut its losses after the project went defunct due to lack of gas. The company aims to use proceeds from the sale of these units for pare debt.
